The rising bad loans in the agriculture and the MSME (Micro Small and Medium Enterprises) sectors of Gujarat have pushed NPAs (Non-Performing Assets) of banks near the Rs 30,000 crore-mark.
The latest report of the State Level Bankers’ Committee (SLBC) released Friday states that the total advances of banks (also referred to as bank loans) in Gujarat stood at Rs 4.38 lakh, while the gross NPAs stood at Rs 29,734 crore (6.78 per cent). During June 2015, this quantum of NPAs was just Rs 15,117 crore (or 3.87 per cent).
The NPAs in MSMEs and agricultural term loans — that fall under priority lending — have almost doubled in Gujarat when compared to last year. During the current 2016-17 fiscal, banks in Gujarat have targeted to disburse Rs 24,422 crores to the MSME sector. Of this 44 per cent has been achieved till June 2016. At the end of June 2016, the bad loans in MSMEs stood at Rs 6,472 crore. This is more than double the Rs 3013 crore worth of NPAs that existed in June 2016.
“The NPA under banking business in Gujarat for the quarter ended June 2016 stood at 6.78 per cent which is around 80 basis point above the previous quarter. However, the reported NPA in Gujarat is less compared to national level which stood at 8.7 percent for the same quarter,” said Vikramaditya Singh Khichi, the convenor of SLBC.
Compared to the last quarter, the MSME advances in Gujarat also declined by Rs 3,420 crore in June 2016. When asked if this was a fall-out of the NPAs in the sector, Khichi said, “There is a negative growth in MSME advances for the quarter ended June 2016 because the credit off-take remained low under various segments of MSME. There was credit contraction in segments like infrastructure, Gems and jewellery, and cement which could have spilled over to the ancillary units in the MSME sector also. However, this trend of continued moderation in MSME sector is in sync with the trend at national level.”
Similarly, the NPAs in agriculture term loan that are made available to farmers for activities other than seasonal agricultural operations — like dairy, plantation and horticulture, farm mechanisation, minor irrigation, etc —- have risen to Rs 1866 crore from Rs 1,081 crore a year ago.
According to the SLBC report, the percentage of gross NPAs among nationalised banks of the state has touched the double figure mark of 10.88 per cent, while the bad loans among private banks stood at 1.25 per cent. Among the nationalised banks the highest percentage of gross NPAs was seen among Indian Overseas Bank (24.57 %), Allahabad Bank (23.88%) and UCO Bank (17.57%).
During the first quarter, banks in Gujarat also disbursed Rs 115 crore to 392 MSME units under the Credit Linked Capital Subsidy Scheme for Technological Upgradation (CLCSSTU) scheme.
Bank Deposits pick up
The aggregated deposits of banks in Gujarat increased by Rs 14,857 crore in absolute terms from Rs 5.38 crore as of March 2016 to Rs 5.52 crore in June 2016, registering a growth of 2.76 per cent, as against 1.69 per cent growth registered for the first quarter in 2015. The highest percentage-wise growth was registered by District Central Cooperative Banks (5.52%), followed by the State Bank of India Group (3.73%), Regional Rural Banks (3.75%), nationalised banks (2.5%) and private banks (1.72%).
The NRI deposits increased by Rs 672 crore and stood at Rs 65,189 crore, forming 11.79 per cent of the total deposits as on June 2016. In June last year, the NRI deposits stood at Rs 59,039 crore.