Non-performing assets (NPAs) of banks in Odisha has climbed to 7.69 per cent by the end of March 2014 mainly due to high slippages on agriculture and education loans. The figure is higher than the pan-India gross NPAs of state run banks at 4.44 per cent of total advances in the same period.
NPA rate in the state is the highest in case of agriculture term loans at 15.05 per cent while NPA for the overall agriculture sector is 10.47 per cent.Next to agriculture sector that has contributed to the deteriorating asset quality of banks is education where NPA stands at 10.32 per cent. The MSME (micro, small & medium) enterprises sector and housing sector have NPAs of 8.06 per cent and 33.48 per cent respectively.
The State Level Bankers’ Committee (SLBC) has raised concern on the alarming NPA rate at a time when asset quality of banks across the country is deteriorating.
Slowing economic growth and high interest rates have stunted ability to borrowers to repay loans, causing bad loans or NPAs to pile up at banks. Nationwide, sectors like infrastructure, iron & steel, power, textiles and ship building are the biggest contributors to stressed assets of banks.NPA refers to loans that are in jeopardy of default. Loans are classified as NPAs if the borrower has failed to make interest or principal payments for 90 days.
An analysis of overdue and NPA position of PSU banks in the state reveals that the average rate is 8.34 per cent (as on March 31, 2014). State Bank of India (SBI), the country’s biggest public sector lender has a steep NPA rate of 10.14 per cent given the bank’s diversified credit portfolio and volume of disbursements. SBI has so far advanced Rs 21613 crore credit of which Rs 2301 crore is still to be recovered. SBI’s NPA rate in Odisha is lot higher than its pan-India bad debt of 4.95 per cent.SLBC data shows some other public sector banks with higher NPAs but comparatively less credit flow than SBI.
The banks include Andhra Bank (15.66 per cent), Bank of Baroda (14.13 per cent), Central Bank of India (16.16 per cent) and Oriental Bank of Commerce- OBC (13.25 per cent). The PSU banks advanced Rs 62746.37 crore but still awaiting recovery of Rs 9333.38 crore.
For private sector banks, the NPA is only 1.63 per cent while the two regional rural banks (RRBs)- Odisha Gramya Bank and Utkal Grameen Bank are saddled with a high NPA rate of 10.21 per cent. The Odisha State Cooperative Bank also has a worrying NPA of 8.99 per cent.