Money & Banking
NPAs of nationalised banks jumped 143% in two years to March 2017
The gross non-performing asset (GNPA) ratio of 13 public sector banks (PSBs) that peaked in December 2016, have remained just about an average basis. However, compared with March 2015, the growth in NPA jumped 143% in March 2017, says a research note.
 
According to Care Ratings, since March 2016, these banks have continued to witness an increase in NPAs with an increment of about Rs50,000 crore in the next four quarters till March 2017. It said, "This increase was spread quite evenly across the four quarters – Rs20,217 crore in Q1, Rs11,128 crore in Q2, Rs8,318 crore in Q3 and Rs10,642 crore in Q4 (see chart below). Compared with March 2015, growth by March 2017 was 143%. These high NPAs have been a major reason for pressure on profitability as they have been making progressively higher provisions on this count."
 
In the report, the ratings agency says, "The indication is that there is a mixed picture for PSBs so far, and while at the aggregate level, it appears to have stabilised, the ratio has come down for fight of the 13 banks which could improve going ahead. For the other five banks, another quarter’s performance would be critical for drawing any conclusion on whether or not the worst is over."
 
According to report, five PSBs, Central Bank of India, Bank of Maharashtra, Dena Bank Andra Bank and Punjab & Sind Bank the NPA continue to at peak levels during March 2017.
 
Care Ratings says, in terms of the Gross NPA ratio (see chart below), there has been a continuous increase from March 2015 onwards, with two sharp spikes witnessed first in December 2015 by 1.5% and then by 2.67% in March followed by 1.17% in June 2016. Subsequently, the NPA ratio has almost touched 12% by December 2016 and remained virtually unchanged by March 2017, it added.
 
 
"The question posed is whether this is a plateau reached by these banks or whether the number could increase in the coming quarters. Some of these banks have reported that they have managed to lower the volume of NPAs at a faster pace than fresh slippages, which is a positive sign for the system as it does indicate that the worst may be behind us," the ratings agency said.
 

The Reserve Bank of India (RBI) had asked banks to complete the process of asset quality recognition by March 2017. "Prima facie there is reason to believe that the numbers should not increase subsequently and whatever is recognized would be more on new loans rather than the existing portfolio. This would hold especially for banks which have recorded lower NPA ratios in March 2017 compared with December 2016," Care Ratings concluded.

User

COMMENTS

shushli tiwari

1 week ago

The Reserve Bank of India may put restriction on United Bank of IndiaBSE 2.26 %'s branch expansion and direct it to make higher provisions to cover risks due to its rising stressed loans, Equity tips

shushli tiwari

1 week ago

The Reserve Bank of India may put restriction on United Bank of IndiaBSE 2.26 %'s branch expansion and direct it to make higher provisions to cover risks due to its rising stressed loans, Equity tips

Ashok m Rane

1 week ago

Public Sector Banks r earning ( Making Operating Profit) for the benefit of Bad Borrowers. Obtaining Bank Loans, turning them NPA and getting them written off has become d culture of Businessmen. In d name of Balance sheet clean up thousands of crore NPAs r written off. Unless and untill stringent criminal action is taken against the borrowers this culture will not change. The Graph of Bad Loans will be always increasing. In absence of stringent regulations it is very difficult to make recovery from Big Borrowers. Only small borrowers can be harassed for recovery. Bullying Big Borrowers is just not possible. The Judiciary is also very slow. Hence PSBs should stop granting Bigger Loans and confine their loaning to small borrowers only, to get out of d situation.

SRINIVAS SHENOY

1 week ago

It is hightime the management and the staff in the banking sector work in tandem sincerely on a war footing, to recover the maximum amount of NPAs, which is a drain on the country's economy.

REPLY

Ashok m Rane

In Reply to SRINIVAS SHENOY 1 week ago

Over 70% of Loans are for Big Ticket Borrowers, where recovery by Branch Staff is very difficult. Staff can at the most try recovery of small Loans from Poor Borrowers. Unless stringent action is taken against Big Borrowers, the efforts of Bank Staff will not bear any fruits!

Nifty, Sensex continues to be in an uptrend - Wednesday closing report

We had mentioned in Tuesday’s closing report that Nifty, Sensex were trading higher. The major indices of the Indian stock markets were range-bound on Wednesday and closed with small gains over Tuesday’s close. The trends of the major indices in the course of Wednesday’s trading are given in the table below:

The key Indian equity indices touched new intra-day highs during the mid-afternoon trade session on Wednesday, as a strong rupee and healthy buying in metal and automobile stocks buoyed investors' sentiments. Around 2 p.m. on Wednesday, the NSE Nifty rose by 15.40 points or 0.16% to 9,527.65 points. Investors remained firm ahead of a crucial GST (Goods and Services Tax) panel meet in Srinagar starting on Thursday. Both the benchmark indices touched all-time high levels. Appreciation of the rupee against the US dollar also supported the firmness, according to market analysts.
 
Bharti Airtel on Wednesday announced new plans for its home broadband users, offering up to 100% more high-speed data benefits within the same monthly rentals. "Our new plans are aimed at putting India onto the digital super highway and complement our superfast broadband offerings like ‘V-Fiber'," said Hemanth Kumar Guruswamy, CEO - Homes, Bharti Airtel (India). In-home high speed data consumption in India is increasing exponentially and to serve this growing demand and enable a seamless high speed data experience in a multi-device environment, Airtel has built a future ready network and introduced ‘V-Fiber' that delivers consistently superfast broadband speeds of up to 100 Mbps to homes, the company statement said. Airtel's refreshed broadband plans are designed for ‘V-Fiber' superfast broadband. Bharti Airtel closed at Rs376.00, up 0.35% on the BSE.
 
Pharma major Dr Reddy's Laboratories Ltd has received approval from the US Food and Drug Administration (USFDA) to launch doxorubicin hydrochloride liposome injection, for intravenous use, in the US market. Doxorubicin hydrochloride liposome injection is a therapeutic equivalent generic version of Doxil® (doxorubicin hydrochloride liposome injection). The USFDA approval is an outcome of extensive collaboration with the company's partner, Natco Pharma Ltd. on R&D and manufacturing capabilities, the Hyderabad-based Dr Reddy's said in a statement on Wednesday. "This approval represents the first of its kind for Dr Reddy's in the complex depot injectables arena," explains Alok Sonig, Executive Vice President and Head of the North America Generics business at Dr Reddy's Laboratories. "It is a testament to our commitment to bring affordable generic medicines to market for patients. The approval further validates our capabilities to successfully develop and manufacture complex liposomal formulations. We are preparing for a commercial launch soon," he said. Dr Reddy’s Laboratories closed at Rs2,731.95, up 0.32% on the BSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 
 
 

User

Cyber war: After 'WannaCrypt', world faces massive cryptocurrency attack
After facing a massive "WannaCrypt" ransomware attack that exploited a vulnerability in a Microsoft software and hit 150 countries, the same Windows vulnerability (MS17-010) has also been exploited to spread another type of malware that is quietly but fast generating digital cash from machines it has infected.
 
According to a report in The Registrar on Wednesday, tens of thousands of computers globally have been affected by the "Adylkuzz attack" that target machines, let them operate and only slows those down to generate digital cash or "Monero" cryptocurrency in the background. 
 
"Monero" -- being popularised by North Korea-linked hackers -- is an open-source cryptocurrency created in April 2014 that focuses on privacy, decentralisation and scalability. 
 
It is an alternative to Bitcoin and is being used for trading in drugs, stolen credit cards and counterfeit goods.
 
"Initial statistics suggest that this attack may be larger in scale than WannaCry[pt], because this attack shuts down SMB networking to prevent further infections with other malware (including the WannaCry[pt] worm) via that same vulnerability," US-based cyber security firm Proofpoint researchers were quoted as saying in the report.
 
This is how a cryptocurrency attack works.
 
The hackers need to mine cryptocurrency using computers/computing devices (IoT included).
 
"Mining of cryptocurrency simply means solving complex cryptography problems designed within the algorithm of a cyber-currency that requires a lot of computing," Saket Modi, CEO and Co-founder of Delhi-based IT risk assessments provider Lucideus, told IANS. 
 
To draw a parallel, there can only be 21 million Bitcoins that can be mined out of which 16 million have already been mined, informed Modi. 
 
"Monero", on the other side, is slightly different than Bitcoin but for simplification's sake, it can be assumed that it follows a similar architecture and similar mining process.
 
"Hence, there is a new wave of cyber attacks where the hacker is least interested in the personal information of the victim and instead his only motivation is to gain access to the CPU of the victim's computer/mobile/IoT device so that they can use it to mine more currencies (and correspondingly make more money)," Modi told IANS. 
 
This looks like something more dangerous than "WannaCrypt" as the victim doesn't come to know that they have been hacked, but, on the other side, "the good part is that the hacker here is not interested in the victim's personal data," Modi told IANS. 
 
To achieve this, the hackers find a vulnerability in one of the servers in the targeted organisation or they would infect a website which employees of a targeted organisation often visit.
 
"They would then infect the IT infrastructure of the target with malware and would identify where a server running SWIFT software is installed. They would download additional malware to interact with SWIFT software and would try to drain the organisation's accounts," Altaf Halde, Managing Director of Kaspersky Lab (South Asia), told IANS.
 
According to Proofpoint, the "Adylkuzz" attack is still growing.
 
"Once infected through use of the 'EternalBlue' exploit, the cryptocurrency miner 'Adylkuzz' is installed and used to generate cybercash for the attackers," Robert Holmes, Vice President of products at Proofpoint, was quoted as saying.
 
According to experts, the "Adylkuzz" began its attack on or before May 2, more than a week before "WannaCrypt" arrived and hit 150 countries, including India. 
 
"Indications are that the crooks behind 'Adylkuzz' have generated a lot more money than the 'WannaCrypt' ransomware fiends," The Registrar report noted.
 
According to cyberscoop.com, "Monero" doubled in price over the last month to around $23 while other digital currencies, including bitcoin, saw a mixed month.
 
"Cybercriminals intrigued by the currency's promises of greater anonymity are using it more often on black markets." it said. 
 
This is how organisations can save themselves from such cryptocurrency attacks.
 
"If your organisation has software tools for conducting money transactions like SWIFT software, invest into additional protection and regular security assessment in addition to standard protection measures implemented on all other parts of the organization's network," Halde informed.
 
Protect backup servers as they contain information that can be of use for attackers: passwords, logins, and authentication tokens. 
 
"When deploying specialised software for money processing follow recommendations and best security practices from your software vendor and security professionals," Halde added.
 
In case of suspicion of intrusion, request for professional assistance with incident response. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)