Indian Express: Pune: Wednesday,
August 10, 2016.
Over the last
two financial years, 31 district central cooperative (DCC) banks in Maharashtra
have written off bad debts amounting to Rs 278.54 crore. Documents procured
from NABARD by The Indian Express under the RTI Act show that just a handful of
DCC banks have had their non-performing asset (NPA) limits below the mandated
five per cent mark in the last two years.
DCC banks are
the nodal agencies at the district levels and play a very key role in the rural
economy. Disbursement of crop loans is a major function of these banks and due
to their deeper penetration in the rural areas, these banks always have a
better record in terms of disbursement than other banks. Many a times the local
DCC bank’s branch is the only access to institutional finance for many farmers
in the area. Given the important role they play, political parties vie with
each other to control these banks.
Majority of
the banks in Maharashtra are now controlled by the NCP and the Congress. For
the financial year 2014-15, the DCC banks of Gadchiroli (3.72 per cent), Latur
(3.98 per cent), Raigad (4.59 per cent), Ratnagiri (3.23 per cent) Satara (0.29
per cent) and Sindhudurg (3.78 per cent) were the ones who had adhered to the
set norm. Six of the banks Ahmednagar, Akola, Bhandara, Kolhapur, Pune and
Sangli DCCs had their NPA below 10 per cent while the rest had much higher
NPAs.
Osmanabad DCC
had the highest NPA share of 40.99 per cent with the bank reporting gross NPA
of Rs 310 crore. The cumulative gross NPAs reported by all the banks for the
financial year was Rs 6,765.79 crore.
The financial
year saw nine DCC banks write off bad debts worth Rs 133.95 crore, with Jalgaon
DCC reporting the highest write-off of Rs 86.85 crore.
The last
financial year, despite being a drought year, had surprisingly seen better
performance, with nine DCCs reporting NPAs below 5 per cent. Ahmednagar (4.48
per cent), Gadchiroli (3.24 per cent) Latur (3.60 per cent), Pune (4.86 per
cent) Raigad (4.16 per cent) Ratnagiri (1.90 per cent) Satara (0.37) Sindhudurg
(3.16 per cent) and Thane (3.25 per cent) banks had adhered to the NPA limits.
Akola, Jalgaon, Sangli and Kolhapur DCCs, however, had their NPAs below 10 per
cent, while the rest had much higher NPAs.
This year
also, the Osmanabad DCC had reported the highest NPA of 42.65 per cent, which
amounts to Rs 319.19 crore. The cumulative NPA reported by the banks for the
last financial year was Rs 7,132.34 crore.
Seven of the
DCCs had written off bad debts worth Rs 144.59 crore last year, with the Jalgaon
bank reporting the highest Rs 85.95 crore followed by Mumbai DCC at Rs 51.96
crore.
In 2013, the
Reserve Bank of India had taken the unusual step of de-licencing the DCCsof
Nagpur, Buldhana and Wardha for their continued bad debts.
This had put
a question mark on the disbursement of crop loans in these districts. After a financial
package of over Rs 400 crore, these banks got their licences back this year.
With a
majority of the banks in Maharashtra reporting high NPA figures, there are
chances of similar drastic actions once again.
Senior
officials of the cooperative department said the continuous drought for the
last few years had taken a toll on the financial health of DCC banks.
“The lending
basket of banks should include both agricultural and non-agricultural loans.
But due to the overburden of the agricultural loans the banks have not been
able to set their house in order. We hope after the good monsoon the recovery
will be good and banks would be able to improve their finances,” said a senior
official.
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