Banking stocks lead gains post FM Arun Jaitley's statement on NPAs resolution
BT Online Last Updated: March 24, 2017 | 16:54 IST 
Banking stocks led the gains in market on Friday after Finance Minister Arun Jaitley said his ministry and the Reserve Bank of India have taken a major policy decision on dealing with non performing assets (NPAs) of banks.
"The government and the RBI have taken a policy decision on dealing with NPAs...we will announce the decision in a few days," Jaitley said at the Indian Business Leader Awards organised by CNBC-TV18 in New Delhi. A decision to this effect is expected to be announced soon.
The resolution being worked out with the RBI will put enough pressure on borrowers to settle dues, Jaitley added.
He blamed the bad loans of public sector banks on just 30-50 companies, saying accounts of these will have to be fixed to solve the issue.
While Bank Nifty rose more than 1 percent or 217 points to 21113 level, the BSE Bankex was the top sectoral gainer rising 245 points to 24014 level.
Except Kotak Mahindra Bank, all components on the BSE Bankex were trading in the green. Bank of Baroda (2.65 percent) and ICICI Bank (2.25 percent) were the top gainers.
The Bank Nifty closed 227 points higher at 21,122.55 level. The BSE Bankex also closed 291 points higher at 24061 level.
As on September 30, 2016 gross NPAs of public sector banks rose to Rs 6,30,323 crore as against Rs 5,50,346 crore by June end. This represents an increase of Rs 79,977 crore on quarter on quarter basis. To clean up balance sheet, the government has announced plans to recapitalise the PSU banks.
According to the Finance Ministry data, the NPAs of the country's largest lender State Bank of India is Rs 97,356 crore, followed by Rs 54,640 crore of Punjab National Bank and Rs 44,040 crore of Bank of India.
Bank of Baroda has NPAs of Rs 35,467 crore, Canara Bank (Rs 31,466 crore), Indian Overseas Bank (Rs 31,073 crore), Union Bank of India (Rs 27,891 crore), IDBI Bank (Rs 25,973 crore), Central Bank of India (Rs 25,718 crore), Allahabad Bank (Rs 18,852 crore) and Oriental Bank of Commerce (Rs 18,383 crore).
