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Informist, Monday, Mar. 10, 2025

MUMBAI – Provisional figures provided by the Reserve Bank of India showed that the gross non-performing asset ratio of state-owned banks fell to 2.85% in December from a high of 14.58% in March 2018, Minister of State in the Ministry of Finance Pankaj Chaudhary said in a written reply to a question in the Lok Sabha. Separately, he said the asset quality of loans given to micro, small, and medium enterprises had been improving.

As of Sept. 30, state-owned banks' gross non-performing asset ratio was 3.30%, according to RBI data. In absolute terms, gross non-performing assets of state-owned banks fell to INR 3.02 trillion in December from the peak of INR 8.96 trillion, the minister said. The question from a Lok Sabha member had sought details on loans extended by state-owned banks to Adani Group companies and Reliance Industries between 2014 and 2024. Chaudhary cited RBI rules to say borrower-wise credit information cannot be disclosed.

The minister also quoted central bank data in giving details on micro-, small-, and medium-enterprise loans and bad loans in a written response to another question. While the outstanding loans to the micro-, small-, and medium-enterprise sector had steadily increased since the financial year ended March 2020 to INR 28.05 trillion as on Mar. 31, the gross non-performing asset ratio of this sector had decreased to 4% from 11%.

"Further, as per the provisional data of FY25 i.e. till Dec. 31, furnished by RBI, both Gross NPAs and Gross NPA ratio of MSME Sector decline," the minister said in his response.

Besides the RBI's framework on transfer of stressed assets, the Ministry of Micro, Small, and Medium Enterprises has notified a 'Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises' to provide a mechanism to address the stress in these accounts, the minister said. In the Union Budget for 2024-25 (Apr-Mar), a new mechanism was announced to facilitate continuation of bank credit to micro, small, and medium enterprises during periods of stress, according to the response.

The government has also asked banks to draft and implement a loan policy and loan recovery policy, to establish recovery cells at head offices, and to strengthen information sharing among lenders, according to the reply. The government also introduced measures to support micro, small, and medium enterprises in improving loan repayment capacities under the COVID-19 regulatory package, Chaudhary said.  End

Reported by Cassandra Carvalho

Edited by Rajeev Pai

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