ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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of the problem of the banks 'non-performing assets and sickness in industry. The report for the previous year had placed the aggregate domestic non-performing advances of all public sector banks at 13.59 per cent of total outstanding advances as at the end of March 1991 and at 14.46 per cent as at the end of March 1992; the absolute amount was Rs 17,389 crore for the latter period. The latest report puts non-performing assets at as much as Rs 36,588 crore or 24.2 per cent of aggregate outstanding advances of Rs 25,000 and above as at the end of March 1993. At least another Rs 1,000 crore have to be added on account of non-operating small advances of less than Rs 25,000 each. To what extent is this more than doubling of non-operating assets as reported by banks within a year due to genuine transparency as required by the new prudential system of income recognition, asset classification and provision of bad debts and how much is it due to laxity on the part of banks in recovering their dues? The question remains unanswered in the report. That there is more to it than meets the eye is indirectly evident from the data on sick and weak industrial units reported by banks for the years 1990,1991 and 1992. The total outstanding bank credit blocked in such units (both SSI and non-SSI) was only Rs 9,930 crore, Rs 10,768 crore and Rs 11,533 crore, respectively, in the above years. The inflated estimate of non-performing assets suggests that banks wish to pre-empt the possibility of the specially constituted Recovery Tribunals making them recover loans from their more difficult (or more favoured) borrowers. The RBl's tolerant attitude to banks' risk-reward perception will only go to strengthen their lackadaisical approach to recovering their past loans.

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