SIX BANKS in Gujarat have witnessed one-fourth of their loans turn into Non-Performing Assets (NPAs). The State Level Bankers’ Committee Report (SLBC) that was released on Tuesday showed that Allahabad Bank and Dhanlaxmi Bank reported the maximum percentage of gross NPAs, which was more than 40 per cent of the total advances they had made.
The amount of gross NPAs in Gujarat at the end of December 2018 stood at Rs 38,520 crore which was 6.59 per cent of the gross advances made by the banks. This was a slight fall compared to the 6.79 per cent NPA reported at the end of December 2017 when the amount of gross NPAs of all 50-odd banks in Gujarat stood at Rs 34,563 crore.
Despite the slight dip in NPAs, the percentage of bad loans in the agriculture sector saw a rise to 6.52 per cent at the end of December 2018 from 5.18 per cent a year ago. The highest jump has been in the percentage of agriculture term loans which leapfrogged to 9.24 per cent from the earlier 7.86 per cent. The percentage of NPAs in crop loans too rose to 4.47 per cent from 3.15 per cent in December 2017.
“There is a mentality among farmers in Gujarat not to pay crop loans. When they default on crop loans, they also default on agriculture term loans and so the percentage increases,” said a banker who was present at the SLBC meeting after which the report was made public.
If individual banks are taken into consideration, the highest percentage of Gross NPAs was reported by Dhanlaxmi Bank at 40.98 per cent. Of the total advances of Rs 7,736 lakh, the private bank saw Rs 3,170 lakh turn into NPAs.
Similar is the case with Allahabad Bank where the percentage of gross NPAs is 40.57 per cent. Apart from Allahabad Bank, other nationalised banks that reported higher percentage of NPAs were Bank of Maharashtra (27%), Indian Overseas Bank (29%) and UCO Bank (36%).
At the end of December 2018, the percentage of gross NPAs of all the nationalised banks in Gujarat (excluding SBI) stood at 13 per cent. In comparison, the State Bank of India had an NPA of four per cent, while those of private banks was just 2.13 per cent. Among the small finance banks, Jana Small Finance Bank Ltd reported NPAs of over 36 per cent.