PSBs NPA provisions for 39 months: Rs 3.79 lakh crore!

If one needs any proof that public sector banks (PSBs) are being looted in broad daylight by fraudsters, scamsters, cheats and swindlers of all kinds, here it is: PSBs made upfront provision of Rs 3.79 lakh crore (Rs 3.79 trillion) between March 2014 and June 2017 towards their stressed loans. This information was given by none other than Minister of State for Finance Shiv Prasad Shukla in a written reply to the parliament. The provision of Rs 3.79 lakh crore for three years and three months was twice the provision made by the PSBs in the preceding 10 years.

According to the government, the higher NPAs of the PSBs are a result of the Asset Quality Review of the banks by the RBI and recognition of restructured loans as NPAs. The exponential rise in the stressed assets of the PSBs may also be the result of rise in wilful defaulters and the failure of these banks in recovering outstanding loans. Of course, this is not to say that all the defaulters are fraudsters; many of them may have been genuine cases where the borrower is unable to repay the loan due to losses suffered on account of business downturn or some other reasons. 

But the fact that the NPAs of PSBs have been much higher than private sector banks raises questions about the efficiency, competence and integrity of the PSB managements. The recent mega frauds involving the PNB, Union Bank and other PSBs have glaringly exposed the rot in the public sector banking system.