Concerned over rising bad loans, Finance Minister Pranab Mukherjee today asked the banks to take steps to manage their non-performing assets (NPAs) which has grown on account of economic downturn. Mr. Mukherjee said NPAs have grown at an uncomfortable and unacceptable rate in the past couple of years.

The banks, he added, have to tread cautiously in the risks confronting the banking sector, especially the risks arising out of the asset quality, market volatility and the global downturn.

The Minister talked about rising bad loans of the banking sector at a function to launch the 4001st branch of the Bank of India (BoI). Mukherjee inaugurated the branch at Manipur
through remote control.

NPA of public sector banks was about 3.3 per cent of the assets in 2011-12 as against 2.3 per cent a year ago. Several companies are opting for corporate debt restructuring (CDR) to tide over the difficult financial situation in the ackdrop of slowdown.

Later talking to reporters, Financial Services Secretary D K Mittal said that while NPAs are concern, there was othing to panic. He said NPAs is not something which means that assets are lost, it only means that these asset is not able to pay me for 90 days.Recovery by banks in the last quarter of 2011-12 was highest ever.