The financial year last ended had seen a huge large increase in bad loans owing to the economic slowdown. This year banks are being hopeful aiming at a better performance following an improved economic scenario and repayment behavior.

The last year saw public sector banks booking huge amounts of bad loans. State Bank of India, the largest bank of the country booked the highest growth in NPAs.

SBI's gross NPAs rose by Rs 3,820 crore to Rs 19,534 crore by the end of March. Bank of India's bad loans almost doubled to Rs 4,882 crore in the 12 months ending March 31. 2010.

The preformance of private banks has been better than the public counterparts. Biggest private sector entities, ICICI and HDFC Bank showed only a marginal decline in NPAs.

Gross bad loans of ICICI Bank declined to Rs 9,480 crore at end-March, from Rs 9,649 crore a year before and in case of HDFC Bank, they were down to Rs 1,816 crore from Rs 1,988 crore.

The slippages last year could be mainly attributed to corporate and small and medium size enterprises.

A senior Bank of India official said, "We do not expect in FY-11 a repeat of the huge additions (absolute) to bad loans that happened in 2008-09 and 2009-10. The business environment is looking up, which will improve the repayment capability of some NPA accounts. Also, some loans for which full provisions are made would be written-off from the books."