Bad debts of banks rise by Rs 5,000 cr in 6 months

The apex bank has, for the first time, included a new classification of loan accounts in its latest defaulters’ list called accounts under caution (AUC). The amount involved in AUC is to the tune of Rs 93.05 crore.

Among the 5,819 defaulters in March 1998, there are 3,650 doubtful accounts amountingto Rs 19,395.89 crore, 1,465 suit-filed accounts amounting to Rs 5,946.43 crore and 671 loss accounts at Rs 3,097.01 crore.

In contrast, of the 5,267 defaulters in September 1997, there were 3,269 doubtful accounts amounting to Rs 16,223.12 crore, 1,373 suit accounts involving Rs 5,338 crore and 582 loss accounts amounting to Rs 2,194.4 crore.

According to bankers, loss accounts form about 10 per cent of the total sticky loans. Banks are required to make 100 per cent provisioning for the loss accounts which are not backed by any collaterals.

Banks are also required to provide 10 per cent towards sub-standard assets and 20 per cent towards doubtful assets in the first year which goes up to 30 per cent and 50 per cent progressively.

Till March 1998, the State Bank of India accounted for the maximum number of defaulters at 698, up from 602 in September 1997.

Among the financial institutions, ICICI has recorded the largest number of defaulters at 495 amounting to Rs 1,634 crore, up from 470 crore (Rs1,855 crore) in September 1997.

IDBI’s NPAs surged to Rs 2,323 crore involving 312 accounts in March 1998. The institution had an NPA level of Rs 1,359 crore from 258 accounts in September 1997.

The Delhi-based Industrial Finance Corporation of India has added 85 new defaulters between September 1997 and March 1998. The institution’s NPAs, which were pegged at Rs 1,018 crore (284 accounts) in September 1997, went up to Rs 1,536 crore (369 accounts) in March last year.

The RBI defaulters’ list, which had just 377 names till 1992, added 690 names in 1993, 700 in 1994, 697 in 1995, 775 in 1996, 816 in 1997 and 586 in 1998.

Weak banks like United Bank of India (107, 107), Allahabad Bank (127, 131), United Commercial Bank (150, 146), Bank of Maharashtra (136, 142), Syndicate Bank (129, 134), Vijaya Bank (105, 97), Andhra Bank (68, 95), Indian Overseas Bank (107, 105), Indian Bank (397, 428) and Central Bank of India (250, 257) have been able to contain the rise in the quantum of sticky loans by notexpanding their loan portfolio. Big banks like Bank of India (316, 345), Bank of Baroda (152, 220), Union Bank of India (92, 107), Punjab National Bank (233, 251) and State Bank of India (602, 698) have recorded a substantial jump in fresh accretion of NPAs. Bangalore-based Canara Bank has been able to reduce the number of defaulters to 384 from 425.

However, private sector banks like TimesBank, Centurion Bank, HDFC Bank, IndusInd Bank and foreign banks like Citibank, Deutsche Bank, American Express, Bank of America and HSBC have been able to contain their NPAs to a great extent.

The list of defaulters includes JK Synthetics, HMT, India Steamship, Mangalore Chemicals, Parasrampuria Synthetics, Thapar Agro, Jai Engineering, British India Steels, JCT Electricals, Modi Cement, Tata Mill, Poddar Mills, Zenith, Jayant Vitamins and Western India Polychem.