Mumbai: Veteran banker and president of the BRICS-promoted New Development Bank KV Kamath today downplayed the NPA threats, saying worries about bad debts are over-blown and that higher growth will ensure that stressed assets turn productive in the short-term.
"I don't understand what the noise is about...My belief is that most NPAs will turn productive in the short run, and not in the long-term," he told reporters on the sidelines of a CII event to encourage trade and innovation ties between India and China here this evening.
Comparing the Indian scenario with China's in the early 2000s, Kamath said at USD 500 billion, non performing assets accounted for 50 per cent of the northern neighbour's GDP at that time and now, have recovered to be among the largest banks in the world.
"We are (NPA numbers) not even 10 per cent of GDP. I think we should make less noise about it," he said, adding that we should not be "freightened by the clean-up that has started".
Last week, Minister of State for Finance Jayant Sinha had said NPAs rose to over Rs 8 trillion or 11.25 per cent of the
When asked about the lack of transparency in the Chinese system, he exuded confidence that the clean-up which happened through asset sales and land sales were done in a proper manner.
Kamath expressed confidence that country is certain to grow at 7.5 per cent and inching to the double-digits mark,
and this can help the banks clean up the NPA problems in the short term itself.
Kamath, who is credited with taking ICICI Bank to become the biggest private sector bank in the country, said the steps being taken by the government are in the right direction.
Drawing parallels with the Vajpayee government's schemes like the Gram Sadak Yojana and Golden Quadrilateral project, Kamath said the increased public spending through on roads and power sector will push up the overall growth.
"I used to be bullish, and I continue to be bullish. I think the country will change dramatically," he said.
Published Date: May 10, 2016 11:14 am | Updated Date: May 10, 2016 11:14 am