State Bank of India and 12 other state-run lenders, struggling with rising bad loans and losses, are set to get Rs.22,915 crore in capital as the government seeks to boost loan growth in Asia’s third-largest economy.
According to the latest announcement, State Bank of India has been allocated Rs.7,575 crore, Indian Overseas Bank Rs.3,101 crore, Punjab National Bank Rs.2,816 crore, Bank of India Rs.1,784 crore, Central Bank of India Rs.1,729 crore, Syndicate Bank Rs.1,034 crore and UCO Bank Rs.1,033 crore.
Other state-run banks that received capital support included Canara Bank (Rs.997 crore), United Bank of India Rs.810 crore), Union Bank of India Rs.721 crore), Corporation Bank Rs.677 crore), Dena Bank Rs.594 crore) and Allahabad Bank Rs.44 crore).
Total stressed assets of state-run banks as of 31 March were at 14.5% of total advances. This may increase, warned a recent report released by the Reserve Bank of India (RBI).
The gross non-performing asset (NPA) ratio of state-run banks may rise to 10.1% by March 2017 from 9.6% as of March 2016, RBI’s financial stability report said, warning that under a severe stress scenario, it may rise to 11% by March 2017. Further, their capital adequacy may also fall to a record low of 10.3% by March 2017, as against 11.6% as of March 2016.
State-run banks have seen their asset quality deteriorate and profitability suffer after RBI pushed lenders to classify visibly stressed assets as NPAs after an asset quality review in 2015-16. As a result, bad loans of the 40 listed banks surged to Rs.5.8 trillion. The losses also mounted with state-run banks reporting a loss of Rs.23,493 crore in the quarter ended 31 March and Rs.15,064 crore for fiscal 2016.
According to the latest announcement, State Bank of India has been allocated Rs.7,575 crore, Indian Overseas Bank Rs.3,101 crore, Punjab National Bank Rs.2,816 crore, Bank of India Rs.1,784 crore, Central Bank of India Rs.1,729 crore, Syndicate Bank Rs.1,034 crore and UCO Bank Rs.1,033 crore.
Other state-run banks that received capital support included Canara Bank (Rs.997 crore), United Bank of India Rs.810 crore), Union Bank of India Rs.721 crore), Corporation Bank Rs.677 crore), Dena Bank Rs.594 crore) and Allahabad Bank Rs.44 crore).
Total stressed assets of state-run banks as of 31 March were at 14.5% of total advances. This may increase, warned a recent report released by the Reserve Bank of India (RBI).
The gross non-performing asset (NPA) ratio of state-run banks may rise to 10.1% by March 2017 from 9.6% as of March 2016, RBI’s financial stability report said, warning that under a severe stress scenario, it may rise to 11% by March 2017. Further, their capital adequacy may also fall to a record low of 10.3% by March 2017, as against 11.6% as of March 2016.
State-run banks have seen their asset quality deteriorate and profitability suffer after RBI pushed lenders to classify visibly stressed assets as NPAs after an asset quality review in 2015-16. As a result, bad loans of the 40 listed banks surged to Rs.5.8 trillion. The losses also mounted with state-run banks reporting a loss of Rs.23,493 crore in the quarter ended 31 March and Rs.15,064 crore for fiscal 2016.
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