Small Taxpayers To Get Relief Of RS. 6,600

 Small taxpayers stand to get annual benefit of Rs.6,600 on account of rebate and increase in tax deduction limit on the rent for accommodation proposed in the Budget 2016-17. 

"Tax rebate has been increased from Rs. 2,000 to Rs. 5,000, straight away benefit Rs. 3,000 for person having income of Rs.5 lakh per annum," Revenue Secretary Hasmukh Adhia said in the post Budget interaction with media. 

"Second benefit is deduction for rental which comes to Rs.3,600 extra. In all they get relief of Rs. 6,600," he said. 

This benefit is available for individuals with income up to Rs. 5 lakh. 

The government has proposed to increase the limit of deduction of rent paid under 80 GG from Rs. 24,000 per annum to Rs. 60,000 to provide relief to those who live in rented houses.

Vinod Rai appointed Chairman of Banks Board Bureau February 28, 2016 PTI

Vinod Rai appointed Chairman of Banks Board Bureau February 28, 2016 PTI

Former CAG Vinod Rai was on Sunday appointed first Chairman of the Banks Board Bureau, which will advise the government on top-level appointments at public sector lenders and ways to address the bad loans problem among other issues. 

Besides, ICICI Bank’s former Joint Managing Director H.N. Sinor, Bank of Baroda’s former CMD Anil K Khandelwal and rating agency CRISIL’s former chief Rupa Kudwa have been appointed members.

Mr. Rai was the Comptroller and Auditor General between January 2008 and May 2013, during which a number of CAG reports led to various scams including in the telecom and coal sectors coming to light.

The bureau will give recommendations on appointment of directors in public sector banks and advise on ways to raise funds and mergers and acquisitions to the lenders
There are 22 state-owned banks in India including SBI, IDBI Bank and Bhartiya Mahila Bank.

The BBB was earlier proposed by the government as a body of eminent professionals and officials, which will replace the Appointments Board for appointment of Whole-time Directors as well as non-Executive Chairman of PSBs.

They will also constantly engage with the Board of Directors of all the public sector banks to formulate appropriate strategies for their growth and development.
The bureau will search and select heads of public sector banks and help them develop differentiated strategies of capital raising plans to innovative financial methods and instruments.

It would also be responsible for selection of non-executive chairman and non-official directors on the boards.Besides, the body will also steer strategy discussion on consolidation based on the requirement.The government wants to encourage bank boards to restructure their business strategy and also suggest way forward for their consolidation and merger with other banks.

Govt to give statutory status to Aadhaar

"We will undertake significant reform 

including enactment of a law to ensure all 

government benefits are conferred to people 

who deserve it by giving a statutory backing to

 the Aadhar platform," FM Arun Jaitley said.

10 Big Tax-Related Announcements In Budget 2016

Finance Minister Arun Jaitley did not change income tax slabs in his third Budget, but he did tweak some deductions and announced multiple new cesses, which will impact tax liability for the common man.

Here is a complete list of new tax measures announced in Budget 2016:

Direct Tax:

1) Deduction limit under Section 87A of the Income Tax Act has been raised from Rs 2,000 to Rs 5,000 per annum. This will help over 2 crore taxpayers save more.

2) Taxpayers who live in rented houses and don't get house rent allowance (HRA) can deduct Rs 60,000 per annum from their income from the current Rs 24,000.

3) An additional deduction of Rs 50,000 on interest paid by first-time home buyers on home loans of up to Rs. 35 lakh, provided the house value doesn't exceed Rs 50 lakh, has been announced.

4) Super-rich, or those with an income of over Rs 1 crore, will have to pay more taxes as surcharge has been raised from 12 per cent to 15 per cent.

5) Individuals who receive dividends in excess of Rs 10 lakh per annum will now have to pay 10 per cent tax on gross amount of dividend.

Indirect Tax:

6) Cars priced Rs 10 lakh and above will attract 1 per cent tax. Purchase of goods and services in cash exceeding Rs 2 lakh will also attract 1 per cent tax. An infrastructure cess of 1 per cent on small petrol, LPG and CNG cars, 2.5 per cent on diesel cars of certain capacity, and 4 per cent on SUVs will make buying all cars costlier.

7) Eating out in restaurants, buying property and insurance, and making mobile phone calls will become more expensive from June 1, 2016 because of a "Krishi Kalyan" cess of 0.5 per cent, which will be levied on all services.

8) Cigarette prices will go up from next financial year as excise duty on tobacco products (other than beedi) has been hiked from 10 per cent to 15 per cent.

9) Single-premium insurance premiums will get cheaper as service tax on policy premiums has been cut from 3.5 per cent to 1.4 per cent.

10) Branded retail garments will become costlier as Budget 2016 has proposed a 6 per cent excise on branded retail garments priced more than Rs 1,000. Imitation jewellery is also set to cost more as basic customs duty has been increased from 10 per cent to 15 per cent.

Government of India has increased the number of GM’s in Nationalised Banks. ( CGM posts discontinued )

The Government of India has increased the number of GM’s in Nationalised Banks.    ( CGM posts discontinued )

Ministry of Finance vide its circular dt.22.02.2016 has increased the posts of General Managers in various Public Sector Banks.  The details are as follows

Name of The Bank	Existing GM’s	Proposed  No of GM,s	Total Business In Crores
Punjab & Sindh Bank	12	12	1,51,511
United Bank of India	13	13	1,77,888
Dena Bank	13	14	1,96,565
Vijaya Bank	13	15	2,14,035
Bank of Maharashtra	13	15	2,23,329
Andhra Bank	16	18	2,84,588
Indian Bank	18	19	2,98,057
Corporation Bank	20	21	3,47,054
Allahabad Bank	21	21	3,46,519
Oriental Bank of Comm	21	22	3,52,049
UCO bank	21	22	3,66,149
Syndicate Bank	22	25	4,61,192
Indian Overseas Bank	24	25	4,25,090
Central Bank of India	26	26	4,50,539
Union Bank of India	29	30	5,79,627
Canara Bank	38	39	8,08,777
Bank of India	38	41	9,43,633
Punjab National  Bank	41	41	8,81,913
Bank of Baroda	43	46	10,54,840

No of GM’s are decided as per the following formula

Total Business of Bank	No of General Managers
Business upto Rs.1,60,000 crores	No of GM’s    12
Business beyond Rs.1,60,000 crores but below Rs.4,00,000 crores	One additional GM for every Rs.20,000 crores
Business Beyond Rs.4,00,000 crores	One additional GM for every Rs.28,000 crores

With regard to the other executives i.e DGM’s and AGM’s , Government has  the ratio should be 1:3:9 ( GM,DGM,AGM )

Further with immediate effect Ministry of Finance has instructed banks to discontinue the practice of re-designating the senior GM’s as  CGM. ( Chief General Manager )

Bank of India’s accounting change saves over Rs 1,000 crore

At a time when most public sector banks (PSBs) have taken a huge hit on their books, mainly because of provisioning for bad loans, Bank of India (BoI) appears to have escaped with a lesser knock in the December quarter. A close look at the bank's financials shows that a small change in the accounting practice — which is within the rules — helped it save over Rs 1,100 crore in the third quarter.

The government-owned bank posted a loss of Rs 1,505 crore in the third quarter of this fiscal as its provisions to cover bad loans more than doubled to Rs 3,603 crore. However, the bank would have run up another Rs 1,170 crore losses had it followed the conservative practice of setting aside 60 per cent as provisions for doubtful loans — loans that are overdue for over one year to three years, also known as D2 category.

In the third quarter, the bank reverted to RBI's prescribed formula of 40 per cent provisioning, which reduced the provisioning by Rs 1,789 crore, and helped it trim losses by up to Rs 1,170.25 crore, BoI said in a filing with the BSE.

Speaking to ET, Melwyn Rego, MD of Bank of India, said that the bank thought it appropriate to follow the RBI's prescribed norms on provisioning since banks have to anyway make proactive provisioning as per the Asset Quality Review undertaken by the regulator.

"The bank is working on a three-pronged strategy — focus on reducing NPAs, increasing low-cost deposits, and rebalancing the loan in favour of retail loans," he said.

This is the second time BoI has changed its accounting procedure without violating RBI norms. 

Bank strike on 29th february deferred

Dear Comrades, Meeting was held today with the management of Dhanalakshmi Bank at Trissur as per directions of the Hon'ble Home minister. The management of the bank assured that they will look into the issues raised by us. As there is improvement in the talks, the proposed strike on 29.02.2016 is been deferred till next announcement. The next meeting is scheduled on 02.03.2016. We look forward to resolve issues amicably. Comrades, although we have called off the strike, we would continue to uphold the hard won legitimate trade union rights earned by our founding fathers. More circular follows.

Forwarded as receivedstrike

Latest update regarding 29th feb bank strike please read

Meeting with the RLC Cochin inconclusive. Mgmt unrelenting. Meeting with the management of Dhanalakshmi Bank tomorrow at Trissur as per directions of the Hon'ble Home minister. Meeting with RLC to continue tomorrow. Meanwhile continue with preparations for strike. March on comrades.
Harvinder Singh
- Rajendran & R Reddy

Need To Reduce Subsidised Cylinder Quota FROM 12 TO 10 PER YEAR

Advocating rationalising LPG subsidy, the pre-budget Economic Survey has called for cutting supply of below-market priced cooking gas to 10 cylinders per household in a year from 12 bottles, at present.

At present, all households are entitled to get 12 cylinders of LPG or liquefied petroleum gas, each with 14.2 kg, at a subsidised rate of Rs. 419.26, against the current market price of Rs. 575.

Any requirement above the entitlement of 12 bottles has to be bought at the market price.

"Rationalisation of LPG subsidy is essential. It may be useful to cap subsidy to 10 LPG cylinders for each household (that being the maximum used for usual domestic cooking)," the survey tabled in Parliament said.

The previous Congress-led UPA government had restricted the number of subsidised domestic cylinders per household to six every year in September 2012, revising it to nine the following January.

The cap was revised in January 2014 to 12 cylinders a year, starting April 1 that year.

The survey also called for "aligning taxes and duties on domestic and commercial LPG users".

Currently, there is no excise duty on a 14.2-kg of subsidised LPG cylinder, but a similar sized non-domestic bottle attracts 8 per cent levy.

Besides, while a subsidised domestic cylinder is exempt from customs duty, a 5 per cent import duty is levied on non-domestic LPG cylinder.

LPG is sold in different pack sizes - 5 kg, 14.2 kg and 19 kg. A household customer is allowed 12 cylinders of 14.2-kg each or 34 cylinders of 5 kg each during a year at subsidized rates.

The subsidised LPG cylinders are exempt from excise as well as customs duty but not the other categories including 19-kg commercial cylinders.

This anomaly has led to diversion or black-marketing of subsidised cylinders for other uses. Earlier, the government had asked well-off people to give up using subsidised LPG and instead buy cooking fuel at market price. So far, over 65 lakh consumers, out of a total of around 15 crore, have responded to this 'GiveItUp' campaign.

The subsidy payout on LPG in 2014-15 was Rs. 40,551 crore, which this fiscal will be less than half as petroleum prices have slumped to a six-year low. During April-December, the subsidy outgo was Rs. 12,092 crore.

EPFO Tightens Norms for Withdrawal of Provident Fund

Retirement fund body EPFO has tightened norms on withdrawal of provident fund as well as investment of such amount in Varishtha Pension Bima Yojana for its over five crore subscribers. 

"Now, the subscribers will not be able to claim withdrawal of their provident fund after attaining age of 54 years. They would have to wait till attaining the age 57 years. The ministry has notified new rules," a senior official told PTI. 

As per the earlier norms, the Employees' Provident Fund Organisation (EPFO) subscribers were allowed to claim 90 per cent of their accumulations in their PF account at the age of 54 years and their claims were settled just one year before their retirement. 

The official said that the earlier clause was relevant because there were establishments where retirement age was 55 years or 56 years. 

"In today's scenario when retirement age is 58 years across all organisation the clause of scheme is not relevant. But the big change is that now under this facility, the subscriber would be able to withdraw his contribution and interest earned on it unlike 90 per cent of the total accumulations earlier," he explained. 

In another change, EPFO has made it mandatory to wait till attaining the age of 57 for claiming PF withdrawal for transferring that to the Life Insurance Corporation of India for investment in Varishtha Pension Bima Yojana. 

Earlier norms used to allow subscribers to claim 90 per cent of their accumulations for investing in the scheme after attaining the age of 55 years. 

The EPFO has also amended the scheme for appointment of upto Joint Secretary level officers by its apex decision making body the Central Board of Trustees' (CBT). 

The official said that this will help expedite promotions and appointment of officials because earlier the EPFO had to seek Labour Ministry approval of any appointment with pay scale of higher than Rs 14,300 to Rs 18,300 pay band. 

In another enabling amendment to the scheme, the subscribers can directly file their claims like PF withdrawals without attestation of present or previous employers. 

Earlier EPFO has launched new simplified form for subscribers who have activated their Universal Account Number to apply directly for settling such claims. 

This amendment to scheme will remove any legal hassle for settling such claims through new simplified forms.

No surcharge, service charge on card and digital payments: Cabinet

With an aim to discourage cash transactions, the Cabinet on Thursday approved withdrawal of surcharge, service charge and convenience fee on card and digital payments.

The Cabinet chaired by Prime Minister Narendra Modi also approved mandating payments beyond a prescribed threshold only through a card or digital mode.

"The essential features of the proposals for promotion of payments through cards and digital means include steps for withdrawal of surcharge, service charge and convenience fee on card and digital payments currently imposed by various government departments, organisations...," according to an official statement.

"The promotion of payments through cards and digital means will be instrumental in reducing tax avoidance, migration of government payments and collections to cashless mode," it added.

The move primarily discourages transactions in cash by providing access to financial payment services to citizens to pay through cards and digital means and shifting payment ecosystem from cash dominated to non-cash or less cash payments, the statement said.

Among other measures aimed at reducing cash transactions include rationalisation of Merchant Discount Rate (MDR) on card transactions and a differentiated MDR framework for some key segments.

Other features include introduction of formula-linked acceptance infrastructure by the stakeholders of certain card products, rationalisation of telecom service charges for digital financial transactions and promotion of mobile banking.

Creation of necessary assurance mechanisms for quick resolution of fraudulent transactions and reviewing the payments ecosystem in the country have also been approved.

Several short-term (to be implemented within one year) and medium-term measures (two years) for implementation by the government ministries, departments and organisations were approved, the statement added.

SBI's Rs 11,700-crore locked as bad loans with wilful defaulters

Loans worth Rs 11,700 crore given by State Bank of India have been locked up as non-performing assets as nearly 1,160 defaulters have willfully decided not to repay.

The bank had identified 1,164 cases of wilful default with outstanding loan amount of Rs 11,705 crore, as on September 2015, as per data collated by the Finance Ministry.

Besides, the bank has declared beleaguered Kingfisher Airlines and its guarantors UB Holdings and Vijay Mallya as wilful defaulters in November. Kingfisher Airlines owes Rs 1,600 crore to SBI.

The bank has filed FIR in 13 cases against wilful defaulters amounting to Rs 13.10 crore, it said.

Among its five associates, State Bank of Hyderabad has the highest number with 197 wilful defaulters as on September 2015, with an outstanding loan of Rs 2,088 crore.

It is followed by State Bank of Patiala with 124 wilful defaulters owing Rs 1,328 crore. Its biggest subsidiary State Bank of Bikaner and Jaipur is struggling with bad loans of Rs 829 crore given to 43 wilful defaulters.

State Bank of Mysore and State Bank of Travancore have 66 and 65 wilful defaulters in their list, respectively. In absolute amount terms, it is Rs 974 crore and Rs 839 crore, respectively.

SBI's gross NPAs or bad loans soared to Rs 72,791.73 crore at the end of the December quarter as against Rs 61,991.45 crore a year earlier.

The mounting pressure due to bad loans hit profitability of the SBI as its consolidated profit plunged 67 per cent to Rs 1,259.49 crore for the quarter on account of higher provisioning for bad loans.

Reeling under stressed assets, state-owned banks' third quarter performance can at best be described as dismal, with Bank of Baroda reporting a loss of over Rs 3,342 crore, the highest from any bank so far.

Faced with huge NPAs, SBI Chairman Arundhati Bhattacharya had said bad loans are expected to surge in the coming quarter, which may hit its profitability.

Global Oil Price Down 2/3rd Since May 2014; Petrol Falls Only 16%

A litre of petrol cost Rs 71.41 in May 2014 when international oil was at $106.85 per barrel but even after an over two-third fall in global rates, the price of petrol has witnessed an only 16 per cent decline and remains at Rs 60 per litre.

In a written reply to a question in Rajya Sabha, Oil Minister Dharmendra Pradhan on Wednesday said the basket of crude oil that India buys averaged $106.85 per barrel in May 2014 and this month it is averaging at $29.80.

Petrol in May 2014, when the BJP government took office, was priced at Rs 71.41 per litre and now it is priced at Rs 59.95 a litre, he said.

Similarly, diesel cost Rs 55.49 a litre in May 2014 and this month it is available at Rs 44.68 per litre.

Mr Pradhan said since May 2014, the government has raised excise duty on petrol by Rs 12 per litre and that on diesel by Rs 13.77 a litre.

Excise duty on petrol on May 1, 2014 was Rs 9.48 per litre and today, it is Rs 21.48 a litre. Similarly, the same on diesel was Rs 3.56 a litre and this month it is Rs 13.77 a litre.

While the price reduction in petrol between May 2014 and February was Rs 11.46 per litre, the government mopped up Rs 12 a litre in excise duty.

Similarly, the reduction in diesel price has been Rs 10.81 a litre but excise duty has risen by Rs 13.77 per litre.

"Retail selling price (RSP) of petrol and diesel in the country are based on their respective international prices and oil marketing companies (OMCs) are at present applying Trade Parity Pricing methodology to compute the RSP," Mr Pradhan said.

Other cost elements in the retail selling price of petrol and diesel viz excise duty, BS-IV premium, marketing cost and margins are specific costs which do not increase/decrease with the volatility in international prices, he said.

"The element of excise duty which is specific in nature has been increased," he said, adding that most of the state governments also have increased VAT on petrol and diesel.

Prices of petrol and diesel have been made marked determined effective June 26, 2010 and October 19, 2014, respectively.

"Since then, the public sector oil marketing companies (OMCs) take appropriate decision on pricing of petrol and diesel in line with their international price and other market conditions," he added.

StanChart posts first loss in 26 years as revamp costs bite

Standard Chartered reported its first annual loss since 1989 as hefty restructuring costs and weak commodity prices took their toll on the emerging markets-focused lender.

The bank slumped to a headline pretax loss of $1.5 billion, after accounting for costs from redundancies and impairments on bad loans. Underlying profit plunged 84 per cent to $800 million, missing analysts' average estimate of $899 million, according to Thomson Reuters data.

The loss shows the scale of the task facing new Chief Executive Bill Winters as he attempts to restore revenue growth after six successive quarters of decline.

The bank's shares fell as much as 12 per cent before recovering slightly to be down 5.4 per cent at 0942 GMT.

Former JPMorgan investment banker Winters last November announced plans to axe 15,000 jobs and raised $5.1 billion in capital as part of a plan to restore profitability and shore up the balance sheet.

"The challenging external environment is not an excuse for our performance. We are not unwitting victims," Winters said.

"The external challenges increase our urgent need to take all necessary steps to address the structural and operational issues we have identified as critical to improving returns".

The bank said none of its executive directors would be paid a bonus for 2015, while bonuses across its workforce were down an average 22 percent year-on-year.

The lender plans to introduce a new long-term bonus plan for its 200 or so most senior managers that will pay out in 2018 if they meet targets to improve shareholder returns and other strategic objects.

DETERIORATING ENVIRONMENT

Standard Chartered's problems began to emerge in 2012, when after a decade of rising profits the lender was hit by U.S. regulatory fines and the start of a prolonged downturn in emerging markets and commodity prices on which much of its fortunes depend.

Unable to reverse the trend, previous CEO Peter Sands was ousted in February last year.

The deteriorating environment in emerging markets caused the bank's gross level of non-performing loans to jump from $7.5 billion at the end of 2014 to $12.8 billion by end-2015.

However the bank said it is reducing its risk exposure and over the past year had cut its exposure to commodities by 28 percent, with its commodity-linked lending portfolio now less than $40 billion.

"On the assumption that commodity prices remain at around current levels, we would not expect this portfolio to reduce materially from here," Chief Financial Officer Andy Halford said.

Analysts at Bernstein Research said the bank would be able to weather the storm and still had a relatively good underlying business model. "Trade is not dead and Standard Chartered still has a top class franchise in emerging markets," they wrote.

The bank confirmed it would not pay a dividend for 2015, but Chairman John Peace said the board intends a payout for the 2016 financial year.

The bank's shares had fallen 22 percent this year amid a 20 percent drop in European bank stocks as investors worry about slowing growth and lenders' loans to the embattled energy sector.

PSU bank officer union threatens to go on strike on Feb 29

A section of public sector banks' officers have given a call for strike on February 29 to protest termination of P V Mohanan, General Secretary of Dhanlaxmi Bank Officers' Organisation.

Strike, if happens, will coincide with the unveiling of Budget for 2016-17 in Parliament.

According to All India Bank Officers Confederation (AIBOC) General Secretary Havinder Singh, its members will go on a one-day nationwide strike on February 29 as Mohanan, who is also AIBOC, Kerala State President, was terminated from the services of Dhanlaxmi Bank invoking draconian clause.

Dhanlaxmi Bank is an old generation private sector bank based out of Kerala.

"Since conciliation meeting failed with the management to resolve the issue despite all efforts. So there was no alternative but to go on strike," he said.

He claimed that the association has about 2.75 lakh officers as its members.

Many banks including Bank of Baroda, Canara Bank and Andhra Bank have already issued advisory informing about strike call and inconvenience to customers if it materialises.

The bank is taking all necessary steps for smooth functioning of bank branches on the day of strike, if it materialises, Bank of Baroda said in a statement.

According to Canara Bank "a strike call given by All India Bank Officers Confederation (AIBOC) is at industry level and not for bank level issues. In our Bank, only one Association ie., Canara Bank Officers Association is affiliated to AIBOC."

10 PSU banks under CBI lens-The Asian Age

The CBI, which is investigating Rs 6,000 crore suspicious remittances case at a Bank of Baroda (BoB) branch in Delhi, is all set to probe similar irregularities in at least 10 more public sector banks. 

According to sources role of senior officials of several other public sector banks are now under the scanner of the agency. “The agency is preparing to start a separate probe to find-out similar irregularities in other public sector banks,” sources said. 

Investigations by the agency have revealed that 59 current account holders and unknown bank officials of the BoB branch in Ashok Vihar allegedly conspired to send overseas remittances, mostly to Hong Kong, of Foreign Exchange worth approximately Rs 6,000 crore in illegal and irregular manner, through 6,255 transfers during May 2014-July 2015, in violation of established banking norms under the garb of payments towards suspected non-existent imports, they added. 

The CBI recently registered a case under Sections 120-B (criminal conspiracy), 420 (cheating) of the IPC and the Prevention of Corruption Act, 1988, against 59 current account holders and unknown bank officials and private persons on a complaint from BoB. 

Investigations revealed that the accused had abused their official position and in conspiracy with each other and with the said account holders had allegedly cheated and misappropriated the bank funds to the tune of Rs 13.75 crores, thereby allegedly causing loss to Bank of Baroda, sources in the agency said. 

“Accounts were allegedly opened either in fictitious names or in the names of persons who were employed in different companies. Forged and fake identity papers like PAN cards and voter ID cards were allegedly used for opening the accounts in fictitious names,” sources said. 
Meanwhile, the Enforcement Directorate (ED), which is also probing the case, is all set to send judicial requests to the authorities concerned in Hong Kong and the UAE to get details about certain individuals based there as part of its investigations into the case.

Bad Loans Exceed PSU Banks' Market Value

For every Rs. 100 parked in shares of public sector banks, investors carry the burden of Rs. 150 as bad loans, which have cumulatively ballooned to Rs. 4 lakh crore or 1.5 times the market value of these lenders.

In contrast, bad loans of private sector banks are just about 6.6 per cent of their total valuation.

In case of PSU banks, if loans that face the risk of being declared NPAs (non-performing assets) going ahead are also taken into account, their overall stressed advances are estimated to be almost double at over Rs. 8 lakh crore.

The problem appears less acute at private sector banks as their gross NPAs are only about one-eighth at about Rs.46,000 crore, which is also well below their total market value.

The Reserve Bank of India has set a deadline of March 2017 for banks to clean up their balance sheets, forcing them to promptly disclose NPAs, take remedial measures and make adequate provisions in their financial statements. The banks have begun complying with effect from their latest set of financial results, which are for the quarter ended December 31, 2015.

Gross NPAs of banking sector are estimated at over 5 per cent of total loans, while overall stressed assets (including declared and potential bad loans) are at about 11 per cent.

An analysis of their latest quarterly results shows that the cumulative gross NPAs of 24 listed public sector banks, including market leader SBI (State Bank of India) and its associates, stood at Rs. 3,93,035 crore as of December 31, 2015.

This is nearly 1.5-times their total market value, which currently stands at Rs. 2,62,955 crore.

This also marks a rise of over 50 per cent from their gross NPAs totalling Rs. 2,61,918 crore a year ago.

According to the Reserve Bank of India (RBI), an asset becomes a non-performing one when it ceases to generate income for the bank. The banks need to declare a loan as NPA which remains overdue for more than 90 days.

Except for SBI, and a few smaller ones, all listed public sector banks have gross NPAs in excess of their market capitalisation. In most cases, the quantum of bad loans is more than double the market value, while some lenders have gross NPAs as high as four or five-times of their respective market valuations.

On the other hand, most private sector banks have gross NPAs well below their market values, although the quantum of bad loans has risen for them as well in a big way.

Gross NPAs of 16 listed private sector lenders stood at Rs.46,271 crore as on December 30, 2015. This compares with their total market value of over Rs. 7 lakh crore.

Taken together, the cumulative gross NPAs of all listed banks - public and private - has risen to Rs. 4.4 lakh crore, while their total market value stands at Rs. 9.6 lakh crore.

The banks have taken a big beating on their valuations in recent weeks on investor concerns over bad loans.

HDFC Bank, India's most-valued private sector lender, alone commands a market value of about Rs. 2.5 lakh crore, which is not far below the total market value of all listed state-run banks. Besides, SBI alone accounts for almost half of the total valuation of all public sector banks.

In terms of gross NPAs also, SBI comes on top (Rs. 72,791 crore) and is followed by Bank of Baroda (Rs. 38,934 crore). Others with high NPAs include Bank of India, Punjab National Bank (PNB), Indian Overseas Bank (IOB), IDBI Bank, Canara Bank, Union Bank, Central Bank, UCO Bank and Corporation Bank.

Among private sector lenders, ICICI Bank comes on top withRs. 21,149 crore of gross NPAs, while others with high levels of such bad loans are Axis Bank, HDFC Bank, Federal Bank, Karnataka Bank and IDFC Bank.

Raising concerns about the ballooning bad loans, eminent banker and HDFC chairman Deepak Parekh said last week that the health of banking sector was one of the key issues impacting the Indian economy.

As of September 30, gross NPAs of banks stood at 5.1 per cent while stressed advances stood at around 11 per cent. The stressed advances of PSUs stood even higher at about 14 per cent, according to the RBI.

The quarter ended December 31, 2015 has been even more brutal for banks, with at least ten lenders posting gross NPAs in excess of 8 per cent and 22 others of more than 5 per cent.

"The RBI has clearly articulated that band aid solutions no longer work and that deep surgery is needed. I agree. The RBI went on further to state that the recognition of NPAs was the anesthetic needed for the surgery."

"While I absolutely do not wish to second guess the regulators and I do not at all doubt their competence in assessment of the situation, I only wish to caution that too much of anesthesia can also result in a patient becoming comatose," Mr Parekh cautioned.

"The banking sector cannot afford another quarter like the one just gone by, but banks have already warned that the next quarter may also look dismal. In just 40 days, listed banks have lost more than Rs. 1.80 lakh crore in their market cap," he added.