New Delhi: Private banks may be having a lesser amount of bad loans due to their smaller size in comparison with public sector banks (PSBs), but they have surpassed the latter in bad loan growth by a huge margin. Industry-wise loan data by Reserve Bank of India (RBI) has revealed private banks posted a higher bad loan growth than PSBs in the last five years.

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The data accessed by DNA Money through RTI shows private banks have registered high year-on-year bad loan growth rate in 14 industries out of 18 industries, including the infrastructure sector, in the financial year 2018. An analysis of the bad loan data of 18 industries of the last five years - which amounts to 90 instances -  private banks registered a  bad loan growth in 70 instances and a drop in remaining 20. In comparison, PSBs saw bad loan growth in 75 instances and a fall in 15.

Interestingly, the private sector bad loan growth in the last five years has been higher than PSBs in infrastructure, a critical sector comprising six industries—power, telecom, roads, ports, hospital and construction infra.

In 2014, year-on-year bad loan growth of private banks was almost double that of PSBs in infrastructure sector. Private banks’ bad loans grew 220% as compared to 112% for public sector banks during the year. The private sector has maintained this leap in following years, too.

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Private banks beat public sector lenders in bad loan growth