Banking sector worry: Bad loans rise 15% in June

Reserve Bank of India's (RBI) data has revealed that stressed loans have crossed $ 138 billion (approx Rs 8,71,746 crore) in June 2016, an increase of 15% in just six months, data accessed by Reuters showed.

From the total bad loans, public sector banks (PSBs) account for about $122 billion of total stressed loans, while private banks hold $ 14 billion. Photo: Pixabay

There is no sign of relief for Indian banking sector when it comes to stressed assets.

Reserve Bank of India's (RBI) data has revealed that stressed loans have crossed $ 138 billion (approx Rs 8,71,746 crore) in June 2016, an increase of 15% in just six months, data accessed by Reuters showed.

This means a clean-up effort will take longer and cost more than expected, Business Standard said.

From the total bad loans, public sector banks (PSBs) account for about $122 billion of total stressed loans, while private banks hold $ 14 billion, according to Reuters.

To curb these stressed loans, the central bank has been adapting various measures such as asset reconstruction companies (ARC) and Scheme for Sustainable Structuring of Stressed Assets (S4A).

The central bank also issued various guidelines on large corporate borrowers.

But considering the above conditions, looks like RBI along with government are far away from success.

RBI's newly appointed Governor Urjit Patel said the regulator will deal with the bad loans situation with "with firmness but also with pragmatism".

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