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Banks' NPAs up for first time in 6 years

Source: PTI
December 17, 2008 19:37 IST
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The Reserve Bank on Wednesday said the non-performing assets of banks have gone up for the first time in six years in 2007-08 and the bad loans of new generation private banks and foreign lenders are "more noticeable" due to their aggressive lending to real estate and housing segments.

"The gross NPAs of scheduled commercial banks increased during 2007-08. This was the first year since 2001-02 that gross NPAs increased in absolute terms," RBI said while asking banks to give due emphasis to maintaining the credit quality.

The gross NPAs of banks increased by Rs 6,136 crore (Rs 61.36 billion) in 2007-08, the central bank said.

It may be noted that the increase in gross NPAs was more noticeable in respect of new private sector and foreign banks, which have been more active in the real estate and housing loan segments, RBI said.

"It may be noted that banks had registered rapid credit growth during the previous three years. Some slippage in NPAs, therefore, could be expected," the report said. 

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