United Bank of India has topped the list of public sector lenders with maximum bad loans including restructured assets as a percentage of total advances.
According to the data provided by the RBI to the Finance Ministry, United Bank of India’s 21.5 per cent assets are either bad or have been restructured to save them from turning non-performing assets (NPAs).
The other banks that have significant amount of gross NPAs and restructured loans include, Central Bank of India (21.30 per cent), Indian Overseas Bank (19.40 per cent), Punjab & Sind Bank (18.74 per cent) and Punjab National Bank with 17.94 per cent as on March 2015.
State Bank of Patiala, Allahabad Bank, Oriental Bank of Commerce, UCO Bank and Dena Bank all have bad and restructured loans in excess of 15 per cent.
The rising bad loans have been a major concern for the Reserve Bank as well as the government and steps are being taken to deal with it.
Most of the restructured loans are from the corporate sector. The top-30 defaulters are sitting on bad loans of Rs 93,769 crore, which is more than one-third of the gross non-performing assets of PSU banks at Rs 2,55,180 crore as on March 2015.
There are four kinds of restructuring. The first and foremost is restructuring of advances extended to industrial units, restructuring under Corporate Debt Restructuring and restructuring of loans extended to MSME as per RBI guidelines.
However, banks have their own operational rule for restructuring of small loans.
The RBI has not prescribed any board or bank level position at which these loans need to be approved.