The Asset quality of Public Sector Banks has come under stress in recent times. What is / are reasons for the same?
1. The public sector banks have lent high loans to infrastructure and real estate companies
2. The private sector banks are offering better products / services to general public
Select the correct option from the codes given below:
Asset quality of PSBs has come under stress in recent times. As per the RBI’s Financial Stability Report (December 2014),the gross nonperforming advances (GNPA) of scheduled commercial banks as a percentage of the total gross advances increased to 4.5 per cent in September 2014 from 4.1 per cent in March
- Stressed advances increased to 10.7 per cent of the total advances from 10.0 per cent between March and September 2014. Five subsectors, viz. infrastructure, iron & steel, textiles, mining (including coal), and aviation, hold 54 per cent of total stressed advances of PSBs as on June 2014. Among bank groups, exposure of PSBs to infrastructure stood at 17.5 per cent of their gross advances as of September 2014. This was significantly higher than that of private-sector banks (9.6 per cent) and foreign banks (12.1 per cent).
This question is a part of GKToday's Integrated IAS General Studies Module