In a clear indication of the impact of financial stress on the banking sector in Gujarat, a recent report by the State Level Bankers’ Committee (SLBC) has revealed that gross non-performing assets (NPAs) of financial institutions in Gujarat have reached a remarkable 4.74 per cent as on September 30 this year.
According to the report, gross advances of the banks in the state stand at Rs 298,737 crore while gross NPA has risen to Rs 14,161.84 crore for the quarter ending September 30, 2013, The Hindu Business Line reports. As the Net NPA has touched Rs 9,633 crore, the net NPA ratio has increased to 3.22 per cent of the total advances.
“The gross NPA of the banks in Gujarat have increased to one of the highest levels in the banking industry,” Ashwani Kumar, Chairman and Managing Director, Dena Bank said during his address after the 139th SLBC meeting for September quarter. “The national average of Gross NPAs is less than this,” he added. Dena Bank is the convener of the SLBC in Gujarat.
“State government and bank officials had deliberations on how to enhance recovery. We have already placed mechanism like sale of assets, identifying of the weak accounts for the recovery,” Kumar said.
However, the economic slowdown does not seem to have affected all of the banking system as the advances by Gujarat banks increased by 25.77 per cent as against 14.56 per cent jump in deposits against the same quarter last year.