Former Reserve Bank of India Deputy Governor, K C Chakrabarty today said rise in Non Performing Assets (NPA) or bad loan in the banking system is also due to non performing administration.

“The issue of NPAs is due to Non Performing Administration. Discipline is required for everybody, even bankers and borrowers also. If we don’t resolve the issue of NPA quickly then it will be a big problem. Action should be taken against borrowers who do not cooperate” said Chakrabarty.

Rising NPAs has been of the major concerns for the banking industry. In its financial stability report released last December,RBI said the stressed assets -- which includes NPAs and the restructured assets -- have touched 10.2%, including 4.2% in GNPAs (gross non performing assets).

In the financial stability report, RBI has projected the GNPAs to move up to 4.6% by September 2014, and then improve to 4.4% by March 2015.

According to RBI data net NPA of public sector banks rose to 2.02% during 2012-13 compared to 1.53% in the previous year while net NPAs of private sector banks rose marginally to 0.45% as compared to 0.42% in the previous fiscal year. CASANSAAR -(Business Standard)