NPA of nationalized banks reduced to 2.5%

The gross non-performing assets (NPA) of the nationalized banks lowered to 2.5% of their gross advances as on March 2007, as against 8.8% in 2003.

Reserve Bank of India, government of India and the banks led low gross NPA of the nationalized banks, said finance minister P Chidambaram.

Timely actions taken by banks to recover their dues in accordance with their board approved recovery policies led to the decline of NPA. Also, various steps taken by Reserve Bank of India, government of India and the other banks contributed to this.

To keep a tab on major defaulters of bank loans, RBI disseminates the information about borrowers of Rs 10 million and above on half-yearly basis to the banks and financial institutions for their confidential use.

Further, center is also planning to restrict the uncontrolled capital investment by foreign investors in the Indian stock market. Chidambaram said, ``A transparent policy and regulatory framework for investment by foreign institutional investors (FIIs) in the stock markets is in place.``

The government in consultation with the RBI and SEBI reviews this policy periodically viewing the current macroeconomic situation, changing market conditions, challenges faced in the management of the external sector and experience gained so far in administering the policy.