BAD DEBTS IN INDIAN BANKS.

The Indian Commercial banks can be grouped into three types.

1. State owned Public sector Banks. 

2. Private Banks under Indian ownership and 

3. Foreign Banks operating in India.

The PSB’s dominate the banking industry in the country, but their share of assets has gradually come down from 91% in 1990-91 to around 72% in 2014 due to the rapid expansion of private banks.

Private Banks increased their share from 3% to  22% during the same period. The assets and the Foreign Banks stagnated at around 6% throughout.

It is to be noted that the entire share of assets that has been dropped by PSB’s has been picked up by the Indian Private Banks.

As at the end of March 2013 the Gross NPA of the Banks in India was Rs 1,94,100 crores which was 3.3% of their total advances.  The gross NPA of PSB’s deteriorated to 4.45% as at the end of March 2015.

In terms of volumes the gross NPA’s of PSB’s accounted for Rs 1,64,462 crores as at the end of March 2013 but the net NPA’s were much less at Rs 90,000 crores.

In percentage terms the Gross NPA of PSB’s stood at 3.6% of the advances and Net NPA’s were 2.0% as at the end of March 2013.

The Gross NPA’s of Indian Private Banks volume wise were Rs 20,763 crores as at the end of March 2013 and the Net NPA’s were just Rs 5900 crores.

Their Gross NPA was 1.8% of their advances while the Net NPA’s were a mere 0.6%.

This means percentagewise the PSB’s are saddled with 3.5 times more net NPA than their private counterparts. There may be many reasons for this but the situation is alarming and measures have to be taken to evolve a better follow up of advances.  

Between the financial years 2001 to 2013, all Banks together have written off Rs 1,00,000 crores of loans of which Rs 95,000 crores are large loans.