NPA of banks decreased
The news of great relief for the central government is that in the year 2018 to 2020, there has been a big decline in the NPA of banks. Non-performing assets (NPA) of the banking sector stood at Rs 10.36 lakh crore in March 2018, which has come down to Rs 8.08 lakh crore by the end of September 2020.
- Last Updated:February 2, 2021 7:06 PM IS
He said in a written reply that transparently crisis-ridden accounts were reclassified as NPAs by the Asset-Quality Review (AQR) and banks later in identifying the crisis. In addition, provisions were made for the restructured problem prone accounts which were earlier relaxed and in respect of which banks did not provide for loss. The facility for restructuring all such loans was withdrawn.
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He said that as a result of the strategy of identification, resolution, recapitalization and reforms of the distressed loans by the government, the NPA has been reduced by Rs 2,27,388 crore to Rs 8,08,799 crore as on September 30, 2020.Sitharaman announced to create a bad bank in the budget
Let us tell you that Finance Minister Nirmala Sitharaman has decided to create a ‘bad bank’ in the budget to get the banks out of the NPA. This bad bank will be known as Development Finance Institution. The main objective of the establishment of this bank is to get the banks out of submerged debt. Finance Minister Nirmala Sitharaman has announced 20 thousand crores for this in the budget.
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What is bank NPA?
Tell that when a person or an institution does not take money from a bank or return it, then that loan account would be closed. After this, recovery is done under the rules. In most cases this recovery is not possible or even happens, then as a result, the money of the banks is drowned and the bank goes into loss.