With a number of banks across the country in the soup with the surge of bad loans in their books, Bank of Baroda has joined the fold as well by reporting a Q4 loss of Rs.31.02 billion. Though the bank has registered a profit of Rs.1.54 billion, their non-performing assets soared to Rs.70.52 billion against Rs.24.25 billion the previous financial year between the January to March quarter.
In addition, Bank of Baroda reported that their total income has dropped to Rs.127.35 billion against Rs.128.52 billion in the fourth quarter of the previous financial year (2016-2017).
With regard to their non-performing assets, Bank of Baroda reported that their gross NPA has increased by 12.26% in Q4 for the 2017-2018 Financial Year, against 10.46% in Q4 of the 2016-2017 Financial Year. Due to the surge in bad loans, the bank reported a net NPA for the financial year at 5.49% against 4.72% in the 2016-2017 Financial Year.
To combat the issue, the board of Bank of Baroda have agreed to raise an additional fund of Rs.100 billion till March 2019, to stabilize the situation. The report come in a time when the Reserve Bank of India has already put a number of banks under prompt corrective action (PCA) for reporting net losses and surging bad loans for two consecutive financial years. Banks under PCA are currently under lending restrictions and some aren’t even allowed to recruit employees.