According to a report, the percentage of banks reporting a rise in non-performing assets (NPAs) in July-December last year has reduced significantly, indicating stability in credit environment. According to the survey, 58 per cent of the respondent banks reported a rise in NPAs, significantly lower than 80 per cent in the previous round. Infrastructure, metals and engineering goods were key contributors to the bad debt. However, only 28 per cent banks reported a rise in the number of requests for restructuring of loans as compared to 40 per cent in the previous round.
Commenting on the issue, a FICCI Official told the media, “For the forthcoming Union Budget, the banks demanded full tax deduction on the NPA provisioning; reduction in corporate tax rate; and accelerated investments in infrastructure sector.”
"Most of the responding banks have suggested reduction in corporate tax rate from 30 per cent to 25 per cent, lowering of MAT rate to 15 per cent and enhancing tax deductions and exemptions for individuals. This should boost credit demand at both corporate and retail level," he added.