Country's largest lender, State Bank of India has planned to reduce 40% of its total nonperforming assets (NPA). The rise of NPAs has been an eyesore for the entire banking industry, which was worsened by the restructuring of many PSUs in the second half of last year.
The lender saw a substantial rise in its slippages, which rose from Rs. 18,145 crore in FY10-11 to Rs. 26,976 crore last fiscal. The gross NPAs as a ratio of total advances as on 31st March 2012 were 4.44% against 3.28% year before. The bank also saw an increase of 19 basis points in the net NPAs; from 1.63% to 1.82% over the year.
The bank Director, Mr. A. Krishna Kumar stated that the targets could be achieved by working at the grass root level and meeting the borrowers. The effect falling value of Rupee could not be determined at this stage, but the RBI has asked the export houses to convert 50% of their foreign exchange earnings into Rupee and deposit in Indian banks.