Orissa banks show poor loan recovery in key poverty schemes

Review says too slack, for coordination with govt depts.

Poor loan recovery in government sponsored schemes such as the Integrated Rural Development Programme (IRDP) and Pradhan Mantri Rozgar Yojana (PMRY) has marked banks’ operations in Orissa.

The recovery rate in the state was only 49.6 per cent as of March, marginally better than last year’s 49.2 per cent. While public sector banks had overdues of 44.4 per cent, regional rural banks (RRBs) had overdues of 37 per cent. Cooperative banks had an overdue of 30.9 per cent. Overdues were highest for the Orissa State Financial Corporation, at 99.5 per cent, being owed Rs 2,663 crore. The Orissa State Cooperative Agriculture & Rural Development Bank also has a high overdue of 93.1 per cent.

The recovery from IRDP showed a significant dip from 51 per cent in March 2009 to 43.3 per cent by the end of March this year. The recovery under PMRY has also witnessed a decline from 20.6 per cent in March 2010 to 19.2 per cent in March 2011.

Under IRDP, the actual collection of public sector banks was only Rs 112.6 crore, as against the total demand for recovery at Rs 274.3 crore. Likewise, under PMRY, the total demand for recovery was Rs 281.4 crore by the end of March, of which the actual collection was only Rs 54 crore.

For self-help groups (SHGs), the amount collected was Rs 275.9 crore, compared to the total recovery demand of Rs 311.4 crore. The total overdue amount for all the PSU banks under IRDP, PMRY and SHGs, including women SHGs, was Rs 2914.4 crore by the end of March this year.

Among the PSU banks, the overdue was the highest for Bank of Maharahstra, at 96.45 per cent. Other public sector banks with high outstandings were Dena Bank (85.4 per cent), Syndicate Bank (81.8 per cent), Andhra Bank (76.8 per cent), Vijaya Bank (76 per cent) and Central Bank (72.3 per cent).

The overdue of RRBs for IRDP, PMRY and SHGs was Rs 344 crore by the end of this March. Of the five RRBs in the state, Neelachal Gramya Bank and Kalinga Gramya Bank had overdues of 77.2 per cent and 59 per cent, respectively.

The State Level Bankers’ Committee (SLBC) has suggested that banks and government departments need to have joint endeavours, with strategies to improve the performance of recovery. The SLBC has noted that that under PMRY and SGSY, the recovery performance is very poor and needs substantial improvement. It has requested state government officials to be present at recovery camps to boost recovery of the banks’ dues.