Reasons for Increase in NPA’s

The main reasons for increase in NPAs of banks include sluggishness in domestic growth during the recent past, slowdown in recovery in the global economy and continuing uncertainty in the global markets leading to lower exports of various products like textile, engineering goods, leather, gems.
Besides external factors, Finance Ministry's annual report said, ban in mining projects, delay in clearance of projects in power and steel sector, volatility in prices of raw material and shortage of power have impacted operations in infrastructure sectors, which were aggressively funded by the banks in the past.
The infrastructure sector lending had a major bearing on the PSU banks, the report said, adding the loan requirements are such that "only big public sector banks could assume exposure under the consortium arrangements".
In order to address the NPA situation, Government has taken sector specific measures in identified areas like road, steel, power and textiles. It is also setting up six new Debt Recovery Tribunals to facilitate recovery of bad loans.

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http://economictimes.indiatimes.com/articleshow/52270228.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst &

http://www.thehindubusinessline.com/money-and-banking/bad-loan-cleanup-leaves-big-banks-in-the-red/article8617028.ece?homepage=true

Source ET