New Delhi: Exuding his confidence on the banking industry, Finance Minister P Chidambaram on Sunday said the average net Non Performing Assets (NPA) of public sector banks would come down to half per cent within a short period.
Chidambaram, while speaking at a priority credit loan distribution function organised by Indian Overseas Bank in Coimbatore, said the net NPA of the banks was standing at 1.3 per cent at present and it would be brought down to 1 per cent in the coming financial year.
With the cooperation of borrowers, who are repaying loans, the NPA could be brought below 0.5 per cent within a short period, he told PTI.
Asserting that three-year rule under UPA witnessed a GDP growth of 8.6 per cent, Chidambaram said that the 9 per cent growth being witnessed this fiscal would continue in the next financial year also.
Nobody could "question" the fact that the policies pursued by the Centre was the main "reason" for such phenomenal growth and the banks have a major role to play to push the growth further, he said.
Lauding the performance of the banks in agriculture sector, Chidambaram said they had achieved the disbursal of loans target of Rs 1,76,000 crore set for three years in two years. The ministry had now set Rs 2,25,000 crore target for the next year, which he expressed that the banks would achieve without any problems.
Commenting on the budget proposals, Chidambaram said that compared to the "aspirational budget" in 1997, he had presented a "green budget" in 2007 keeping in mind farmers and the rural population.
The 1997 budget was to show the rest of the world that India had awakened and was ready to face global competition. This budget was to share the phenomenal growth achieved by the manufacturing and services sectors with the 60 crore farmers' families living in rural areas, he said.
This was the reason he had provided Rs 50 crore to Tamil Nadu Agricultural University to carry on research and utilise new technology and abundant human resources, he said.
The proposals of schemes for irrigation, farming, desilting of ponds and lakes, employment to one lakh disabled and Rs 6,000 incentives to one lakh unemployed graduates, were all to inform farmers that the Government was with them on their journey to progress.
The banks have so far extended loans to 26 lakh women SHGs across the country and 3.5 lakh in Tamil Nadu alone, he said and asked the women to repay 100 per cent of their loans, as against the present recovery of 98 per cent.
Chidambaram distributed Rs 15.85 crore worth loans to 320 beneficiaries.
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