The gross Non-Performing Assets (NPAs) of Gujarat banks have risen to Rs 42,786 crore at the end of December 2021, the third quarter of fiscal year 2021-22.
Though banks claimed that NPAs account for 5.92% of gross advances, the latest report from the State Level Banker’s Committee (SLBC-Gujarat) stated that there has been a 45% increase in absolute terms compared to the bad loans that existed in December 2020.
While the priority sector, which includes crop loans, agriculture term loans, and MSME loans, accounted for Rs 17,876 crore of NPAs, the non-priority sector, which includes corporate loans, contributed the most to this bad loan kitty, at Rs 24,910 crore, according to the report released during a meeting of the SLBC in Gandhinagar.
NPAs in the non-priority sector stood at Rs 13,649 crore in December 2020, accounting for 3.89 percent of advances. This sector’s NPAs stood at 6.74 percent of advances in December 2021.
MSMEs account for Rs 9,749 crore of NPAs in the priority sector as of the end of December 2021. The state’s agriculture sector has NPAs totaling Rs 6,538 crore.
Housing and educational loans that were less than 1% of total outstanding have risen to 1.37 % and 1.57 %, respectively, by 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%, while among private sector Laxshmi Vikas Bank had 46.07 percent NPA.
The state government urged banks to lend more to Gujarat’s MSMEs and agriculture sector during the SLBC meeting. According to the SLBC report from December 2021, banks’ lending to the agriculture sector increased by 4.38 percent year over year, while lending to MSMEs increased by 19.31 percent.