Kolkata, Aug 24 (IANS) Raising concern over rising non-performing assets (NPA), West Bengal Finance Minister Amit Mitra on Friday said the banking sector is facing a "serious crisis" on the macroeconomic front.
He also said that credit availability to micro, small and medium enterprises (MSMEs) is getting "squeezed" as many public sector banks are restrained from aggressive lending as part of prompt corrective actions.
"It is discomforting for any professional to see massive rise in NPAs. In fact, NPAs have gone up systematically from March 2014," he said while addressing the "Banking Summit" organised by the Indian Chamber of Commerce here.
According to him, the NPAs in the banking sector went up to around Rs 10.25 lakh crore in March 2018, from Rs 2.04 lakh crore in March 2014.
"NPA ratio too jumped to about 11.6 per cent at the end of 2017-18, from 4.4 per cent as of March, 2014," he said
He also said that about 11 public sector banks which are under prompt corrective action had NPA ratio at 21 per cent at the end of March, 2018 and the projection was that the ratio could go up over 22 per cent by end of the current fiscal.
"Lending to MSMEs are getting squeezed as half of the public sector banks which are under the prompt corrective action are not allowed for aggressive lending though the small, medium enterprises are providing employment," Mitra said.
He also said that the MSME sector, which provides livelihood, jobs and stability to democratic polity, is "under threat".
Mitra, however, said that the bank lending to MSMEs was at Rs 44,059 crore in 2017-18 in West Bengal, exceeding the target of Rs 38,000 crore, primarily because the way banks and the state government work together in the state.
"Is it enough? My understanding is that appetite is much higher," he said, adding that MSME lending target in the current fiscal in Bengal was set at Rs 50,000 crore.
This website uses cookies.
