Gross NPAs in banks in Gujarat rise by 45% to Rs 42,786 crore
A year later in December 2021, the NPAs of this sector stood at 6.74 per cent of the advances.
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In December 2020, the NPAs in the non-priority sector stood at Rs 13,649 crore which is 3.89 per cent of the advances.The gross Non-Performing Assets (NPAs) of banks in Gujarat have risen to Rs 42,786 crore at the end of December 2021, the third quarter of financial year 2021-22. Though banks claimed that NPAs account for 5.92 percent of the gross advances, in absolute terms there has been a 45 per cent rise compared to the bad loans that existed in December 2020, the latest report from the State Level Banker’s Committee (SLBC-Gujarat) stated.
While the priority sector — which includes crop loans, agriculture term loans and MSME loans — accounted for Rs 17,876 crore of NPAs, the highest contributor to this bad loan kitty has been the non-priority sector — which also includes corporate loans — at Rs 24,910 crore, states the report unveiled during a meeting of the SLBC where Chief Minister Bhupendra Patel was also present in Gandhinagar.
In December 2020, the NPAs in the non-priority sector stood at Rs 13,649 crore which is 3.89 per cent of the advances. A year later in December 2021, the NPAs of this sector stood at 6.74 per cent of the advances. In the priority sector, MSMEs account for Rs 9,749 crore of NPAs at end of December 2021. There are Rs 6,538 crpre NPAs in the agriculture sector of the state. The housing and educational loans that were under one per cent of the total outstanding have climbed to 1.37 per cent and 1.57 per cent respectively at the end of December 2021.
“The situation of NPAs in Gujarat is not alarming. There has been some NPAs that were reported from the retail sector but the year-on-year spike seen in NPAs is largely due to the reporting of bad loans after the blanket ban on reporting of NPAs was lifted by the Supreme Court,” said MM Bansal, convenor of SLBC Gujarat who was part of the meeting in Gandhinagar.
Among public sector banks in Gujarat, UCO bank reported the highest gross NPA at 34.05 per cent, while among private sector Laxshmi Vikas Bank had 46.07 percent NPA.
During the SLBC meeting, the state government urged banks to lend more to MSMEs and agriculture sector in Gujarat. According to the December 2021 SLBC report, there is a 4.38 per cent year-on-year growth in lending to agriculture sector by the banks, while the lending to MSMEs grew by 19.31 per cent during the last one year.
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