The problem of NPAs at Indian banks

For a decade, Indian banks have been battling bad loans. In the past five years, they have managed to reduce NPAs, but not by recovering loans. The lenders simply wrote them off, bringing down the NPA figure by Rs10.09 lakh crore in this period.

The Indian Express’s RTI findings showed that public sector banks held almost 46% of all Mudra loans in value terms till June 30 this year. Of these, loans of Rs31,025 crore turned bad. This was 4.98% of their outstanding Rs6.23 lakh crore.

Private banks’ NPAs in the past seven years, however, stood at Rs6,469.2 crore, only 1.32% of their outstanding.

The government bank’s average loan size, too, was much larger than that of an average private bank. The private sector had a 60% share of the healthiest Shishu category.

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