Co-op & rural banks buckle under Rs 4,200cr NPA

Times of India: Bhopal: Wednesday, November 29, 2017.

Madhya Pradesh district cooperative and rural banks are saddled with a back-breaking Rs 4,200 crore in non-performing assets (NPAs) and the state accounts for more than 10% NPA of district cooperative banks across the country.

These stunning figures were revealed following an RTI query by Neemuch-based Activist Chandrashekhar Gaur. District cooperative banks and state cooperative bank account for around Rs 2,900 crore of this Rs 4,200 crore burden. Among regional rural banks, Madhyanchal Grameen Bank has the maximum NPA of Rs 539 crore. Astonishingly, district cooperative bank Hoshangabad alone has NPAs of more than Rs 250 core, says the RTI reply.

Asked about the huge burden, Jila Shahkari Bank Maryadit Hoshangabad, general manager, RBS Tomar said, "We are focusing on recoveries. It was primarily due to crop damage that recoveries were low."

Sources in the cooperative department say that due to these NPAs, 38 district cooperative banks face severe liquidity crisis. The department recently held workshops to ensure recovery and also work on strategies to increase cash inflow.

"Around 10-12 banks out of the 38 district cooperative banks are facing this situation. We recently held a workshop to tackle the NPA problem and are working on a two-pronged strategy. First, to speed up recovery of loans and second, to increase deposits so that we do not face liquidity as cooperative banks are the ones that implement majority of welfare schemes of the government. We are also taking measures to send a message across to farmers that there is no loan waiver in the offing. It's primarily due to this belief that there are low recoveries," principal secretary, cooperatives, K C Gupta told TOI.

Sources say that of the 38 cooperative banks, the one at Hoshangabad has the highest NPA of Rs 250 crore, followed by Jabalpur (Rs 196 crore), Gwalior (Rs 185 crore), Satna (Rs 177 crore), Morena (Rs 145 crore) and Datia (Rs 140 crore). Any loan where there has been no repayment in three years is considered an NPA.

Madhya Pradesh Rajya Shahkari Bank Maryadit the state cooperative bank has a whopping NPA of Rs 513 crore. This is second only to the Maharashtra state cooperative bank. NABARD has informed that NPAs of district cooperative banks in the country is around Rs 22,000 crore.

An official with Madhyanchal Grameen Bank, which has operations in 12 districts, said: "We are facing low recoveries mainly because consumers, who are mostly farmers, believe there will be a loan waiver." An official with Central Madhya Pradesh Grameen Bank, said, "On the one hand, consumers believe that there will be a loan waiver, and on the other, there has been successive crop loss, Then, there are political interventions. Whenever we start recoveries, people come in groups and start staging protests."