PSU bank saw a dip in bad loans in the second quarter of FY20, even as private-sector peers posted a rise with the RBI getting strict on under-reporting of NPAs, a report said. The bad loans for government banks fell by nearly Rs 80,000 crore during the 12-month period ended September 2019, CARE Ratings said. The NPAs fell from Rs 9,92,964 crore in the second quarter of last year to Rs 9,18,487 crore in September 2019 on account of considerable narrowing in loan slippages and boost recoveries, it added. In Q2FY19, the gross NPAs for PSU banks rose by nearly 19 per cent.
“While the asset quality of PSBs have improved, they recorded a net loss of Rs 727 crore in the September quarter, down from the steep loss of Rs 11,114 crore in the year-ago period. PSBs recorded a net profit in Q1FY20. The net profit of the private sector banks recorded a marginal decline in Q2FY20 on account of changes in the deferred tax rate,” the report added. The gross NPA of private banks increased by more than Rs 6,000 crore from Rs 1,85,027 crore during Q2FY19 to Rs 1,91,191 crore in Q2FY20, a rise of 3.3 per cent, CARE Ratings also said.
Even as the asset quality of the government-backed banks saw an improvement in the given period, they posted a net loss of Rs 727 crore in the quarter ended September 2019, down from the steep loss of Rs 11,114 crore in the year-ago period. In the first quarter of FY20, banks recorded a net profit. The net profit of the private sector banks posted a marginal decline in Q2FY20 owing to changes in the deferred tax rate.