Six key sectors contribute to 36% of bad debts: RBI Data
The Reserve Bank of India (RBI) has said about 36 % of the overall 4.1 % bad assets in the system have been created by the six sectors of the economy – infrastructure, metals, textiles, chemicals, engineering and mining.
The central bank stated that these sectors, though, have only 30 % of the credit share have the maximum number of non-performing assets. The central bank, in its annual report for FY2013-14, said gross non-performing assets in the system have grown to 4.1 % in FY’14 from 3.4 % a year ago. This is a bad trend as the investors will be wary and the investments in these sectors will slow down.
This report also mentioned that the contribution of mandatory priority sector loans to the overall bad assets have come down during the last fiscal. This was expected as no investor would like to invest in non-performing assets (NPA). The report also explained that the state-run banks are the chief sources of stress.
RBI said these six specifically identified sectors of infrastructure, metals and products, textiles, chemical and chemical products, engineering industries and mining and quarrying alone contributed 36 % of gross NPAs. This is against their 30 % contribution to the total advances. If the government does not step in, then the situation might worsen in the coming months.
Source- Financial Chronicle
Chemicals, Engineering, Infrastructure, Metals, Non-performing assets, RBI, Reserve Bank of India, Textiles
