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Nov 15, 2012

NPA is reflection of the slowdown in the economy – P. Chidambaram

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Photo Credit - The Hindu Business Line

Today Finance Minister P. Chidambaram had a meeting with nationalized bank chiefs about making strategies to recover from the economic slowdown. The FM said to the fellow meeting members that Govt. will be working to make a strategy to help the industry segments which are affected by the economic slowdown.

After the meeting with Bank chiefs FM addressed to the press and said - “If the economy improves and growth improves, the sectors (which are not doing well) will recover. But in the meanwhile, we will have to do some handholding and try to help these sectors recover”. In the above address he also mentioned about the Non Performing Assets (NPAs) where he said: “NPA is reflection of the slowdown in the economy’’. He said Govt. is making strategies to look upon the rising NPAs and find other ways to help them perform better. If we go on to the statistics NPAs of Public Sector Banks (PSUs) has been increased by 0.98 percent in this fiscal year due to slow in industries like construction, telecom infrastructure, textiles, food processing and steel.

There are some positive points mentioned by FM where he included that housing and automobile sectors have been doing well in this subdued economy. FM also mentioned that Government will do some capital infusion of around Rs. 15,000 Crore to PSUs like Indian Overseas Bank, Central Bank of India and Bank of Maharashtra.

Earlier this week it is announced that FM will be meeting National bank chiefs to review the financial performance of some under-performing sectors in this subdued economy. Other than that the agenda also included to review the first half economic numbers, deteriorating assets and how to plan for healthy credit growth. The other attendees of this meeting were SBI Chairman, Pratip Chaudhuri, Punjab National Bank CMD, K.R. Kamath, and Indian Bank Association CEO, K. Ramakrishnan.

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