New Delhi: Terming NPAs at 5.2 per cent as high, Finance Minister Arun Jaitley on Friday said it's too early to consider the improvement in the bad loan situation last quarter as a "turnaround" and was keeping his fingers crossed.
"I would take it (drop in March quarter NPAs) only as an initial indicator. At times, when you try to revive the economy, some indicators can always be patchy...I am not drawing any final conclusion from this," Jaitley said.
"If this pattern continues over 2-3-4 quarters, then I will draw a conclusion that there is a pattern. I am keeping my fingers crossed," he said.
Addressing a press meet on one year of the Modi government, he said: "A good signal has emerged that the quarter that ended in March 2015, NPAs have started coming down... This is the first quarter, NPAs in banks were increasing, they have started coming down."
Non-performing assets or bad loans of the total advances had reached a high of 5.64 per cent but period ending March "it has come down to 5.2 per cent...these (5.2 per cent NPA) are also high", he said.
From the decline in one quarter it cannot be concluded that this was a turnaround, he said.
As of December 2014, gross NPAs of PSU banks were at Rs 2,60,531 crore or 5.6 per cent of the total advances.
Echoing similar views the Reserve Bank Governor Raghuram Rajan had said last week that there was no danger of any financial crisis but it may be early to declare that the worst was over on the NPA front.
The Governor said resolution of NPAs will be possible only with higher economic growth, which he termed as "slow" and the actions which the banks take.
The Finance Minister too said that when economy picks up, a "turnaround has to take place" in the banking sector.
"Therefore, the steps in the direction of economic growth is one...we have to do the recapitalisation (of banks) fast," Jaitley said.
He also said steps are being taken to professionalise the banks' boards as appointments would be made through bank bureau.
He also said the vacancies at the top posts in the three banks will be filled by next month.
These banks are PNB, Bank of Baroda and Canara Bank where posts of MD and CEO are lying vacant for many months. However, two more vacancies will be created this month- end as CMD of Bank of India and IDBI are retiring.
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