The credit crunch that led to the non-payment of loans and dues by many borrowers has resulted in a rise in the amount of bad loans in the books of most banks.

Facing the same trend, ICICI has written off a huge amount of retail loans that borrowers were unable to repay from a period of at least more than a year. During the third quarter ending on December 31st, the largest private lender has written-off bad loans of nearly Rs 1,600 crore. These loans were overdue from a long period and despite of writing-off this amount, the bank still has total bad loans worth Rs 9,000 crore in its books.

For a year ending on December 31st 2008, bad loans for ICICI Bank increased by a large amount of Rs 4,114 crore. Bad loans of the bank have been rising by nearly Rs 1,200 crore every quarter from the past few quarters. Most of these loans have been mounting due to a rise in the defaults by individuals.

Deputy Chief Financial Officer at ICICI Bank, Rakesh Jha said: "Outlook on NPLs (non-performing loans) remains the same as we have discussed earlier. As we said in September, over the next couple of quarters, the current trend would continue and thereafter, we should see some easing in terms of addition to NPLs."

Even the largest public sector bank, SBI has been reporting a rise in its NPLs. SBI's Chairman O P Bhatt said that the defaults has been rising from the small and medium enterprises (SMEs) such as gems and jewellery exporters. This is mainly due to the difficult economic conditions prevailing both in India and international markets.

As on December 31st 2008, bad loans for SBI reported an increase by Rs 2,132 crore to Rs 13,314 crore.

The non-performing assets (NPA) in the banks books have been increasing ever since the economic meltdown became aggressive and borrowers started defaulting on their dues. In fact analysts expect the NPAs to rise in the coming times.