Parliamentary committee warns the government, don’t get excited about the reduction in bad loans

The committee expressed apprehension that some impact of the epidemic for the banking sector may be visible ahead, so it is necessary to be cautious.

‘Government should not get excited about NPAs too soon’

A committee of the Parliament recommended the government in the banking sector. non-performing assets ,NPA) or have warned about getting excited about the reduction in bad debts soon. The committee has said that some effect of the Kovid-19 epidemic will be visible later, due to which bad debt may increase. However, the committee also said that the banking system of the country (Banking System Has fought the pandemic situation with strength. But the committee has asked to be cautious about the ongoing uncertainty regarding Corona and has expressed apprehension that the impact of Corona crisis may be seen on the banks. Earlier yesterday only Reserve Bank (RBI) The Governor had said that the NPA position of the banks is in a better position. At the same time, the government is also constantly saying that the condition of banks is improving and the asset quality of banks is getting better than before.

What is said in the report

The report of the Parliamentary Standing Committee on Finance tabled in Parliament on Tuesday said that as far as NPAs are concerned, the banking system has coped well with the shock of the pandemic. The Committee was informed that contrary to the estimates of the Financial Stability Report of the Reserve Bank, the Gross NPA Ratio of commercial banks increased to 9.8 per cent in March 2022 from 7.48 per cent in March 2021. The gross NPAs of public sector banks were 9.11 per cent as on March 31, 2021, which declined to 7.9 per cent at the end of December, 2021. The report said, “The committee cautions against getting excited about the reduction in NPAs soon. Perhaps some impact of the pandemic is yet to be seen for the banking sector. The report says that the excess cash that was injected into the system during the pandemic needs to be ‘recovered’ as there could be a possibility of a rise in NPAs.

What did the RBI governor say?

At the same time, yesterday, the Governor of the Reserve Bank had said during a program that the country’s economy has recovered from the outbreak of Corona epidemic and is now in a better position than before. He said that since the impact of the pandemic in March 2020, Rs 17 lakh crore capital has been injected into the economy. On the other hand, gross NPAs are at lower levels and the position of banks remains very strong.

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