Has NPA recognition by banks post AQR complete or is it just a myth?

Key Highlights: 

• 21 Banks gross NPAs rose to 8.07% in June 2017
• Provisions grew by 22.9% in Q1FY18
• PSBs three times higher than private banks in gross NPAs during

With the end of Asset Quality Review (AQR) in March 2017, it was expected that recognition of bank's non-performing assets (NPAs) must have been complete – leaving better room for resolution of the problem.

First quarter of fiscal year 2017 – 18 (Q1FY18) has begun and a list of 24 banks (10 public sector banks and 14 private banks) have already presented their financial performance.

Banks have conducted the AQR between August 2016 and March 2017 where they were asked to recognise three kinds of loans which included NPAs, restructured loans and projects that did not begin on time. 

During Q1FY18, gross NPAs of these banks in value term rose by 25.8% to Rs 3,33,605 crore compared to Rs 2,65,124 crore in the corresponding period. In percentage terms, gross NPAs which stood at 3.92% in June 2015, 6.96% in June 2016 have reached to 8.07% in June 2017.

Rs 8 lakh crore NPAs may face bankruptcy proceedings by March 2019