Non-Performing Asset in Bank :criteria,latest report
Non-Performing Asset in Bank
Assets are classified as non-performing ones in the Banking sector when Bank does not receive the Principle or Interest towards an advance or loan amount given to a borrower for 90 days. Reserve Bank of India provides certain guidelines to banks to classify Assets held by them based on the same. Such classification of Assets targets to bring in consistent and transparent systems in the Banking sector. Banks generally classify loans and advances as a nonperforming Asset based on certain criteria as given below.
Loss Assets – The first type of Non-Performing Assets are classified under Loss Assets. Reserve Bank of India classifies loans that are non-collectible from borrowers. The other type of Asset that falls under the Loss Assets category is the ones whose value is absolutely low and is not worth considering Bankable. Such low-value Assets are to be considered as unwarranted ones by the Bank as per Reserve Bank of India even if they have some recoverable value attached to them
Doubtful Assets – All assets that have remained in what is considered as the Substandard category for a minimum of 12 months period is classified as Doubtful Assets. These are not only non-performing but also non-collectible owing to their substandard nature. Unlike Loss Assets, usually, the recoverability aspect pertaining to Doubtful Assets is very low or at zero level. As the very name suggests, Doubtful Assets render very little or rather no value to the Banks that hold them.
Substandard Assets – All Assets that remain non-performing for a time period that is equal to or less than 12 months time is classified by the Reserve Bank of India as Substandard Assets. The other way of explaining Substandard Asset when it comes to Banking processes is the one that makes liquidation a difficult task for the Banks that hold them. Banks many a time suffer from losses owing to the substandard quality of the Asset, neither being able to acquire profit out of the same nor being able to liquidate them to save themselves from losses. Substandard Asset does not get converted into a good standard one just by changing the classification of the same.
Some latest report on Non-Performing Asset in Bank
Non- performing assets report by the end of second quarter (September 2017 End) from corporate defaulters:
• Rs.7.34 lakh crore for PSB
• Rs 1.03 lakh crore for private banks
Banks with NPA amounts (in PSB) :
1. SBI (over Rs 1.86 lakh)
2. Punjab National Bank (Rs 57,630 crore)
3. Bank of India (Rs 49,307 crore)
4. Bank of Baroda (Rs 46,307 crore)
5. Canara Bank (Rs 39,164 crore)
6. Union Bank of India (Rs 38,286 crore)
Banks with NPA amounts (Private) :
1. ICICI(Rs 44,237 crore)
2. Axis Bank (Rs 22,136 crore)
3. HDFC Bank (Rs 7,644 crore)
4. Jammu and Kashmir Bank (Rs 5,983 crore)
Top Banks rank as per highest gross NPA ratios (For PSB):
1. IDBI Bank
2. Indian Overseas Bank
3. UCO Bank
4. Bank of Maharashtra
5. Central Bank of India
6. Dena Bank
7. United Bank of India
All above banks have GNPA ratio of over 15 percent (August 2017 Report).
Top Banks rank as per highest gross NPA ratios (For Private):
Note: Only bank GNPA ratio of less than 1 is Yes Bank.