Poor collection from PMRY, IRDP pulls down recovery rates

Banks operating in the state- public sector banks, regional rural banks (RRBs) and cooperative banks continue to struggle with recovery of loans. The overall recovery rate of loans of these banks stands at 42.78 per cent by the end of December 2010.

According to data compiled by the State Level Bankers Committee (SLBC), the recovery rate of the banks fell from 49.21 per cent by the end of March 2010 to 42.78 per cent by December 2010.

The loan recovery rates of public sector banks, regional rural banks (RRBs) and cooperative banks stood at 43.44 per cent, 35.93 per cent and 56.58 per cent respectively (as on December 31, 2010).

The recovery position has been particularly lacklustre in case of government sponsored schemes like Pradhan Mantri Rozgar Yojana (PMRY), and Integrated Rural Development Programme (IRDP).

The recovery rate under IRDP stood at 44.39 while that under PMRY was a meagre 19.94 per cent by December-end.

The SLBC has suggested that banks and the concerned government departments need to evolve joint strategies to improve the recover performance for better recycling of funds. It has also pointed out that the state government officials need to be present at the recovery camps to boost recovery of bank's dues.

The percentage of overdue was the highest for Orissa State Finance Corporation (OSFC) 99.46 per cent. The bank had an overdue of Rs 2672.92 crore by December-end.

The total overdue of PSU banks was Rs 2736.43 crore with State Bank of India having the highest overdue of Rs 2106.50 crore. Among the PSU banks, the rate of overdue for Dena Bank was at a high of 85.41 per cent. Other PSU banks like Syndicate Bank (82.76 per cent) and Vijaya Bank (78.60 per cent) had high overdue rates.

Under IRDP, the total demand for recovery of these PSU banks stood at Rs 219.50 crore by December-end out of which these banks had collected Rs 95.29 crore. Similarly, under PMRY, these banks had collected only Rs 54.51 crore as against the total recovery demand of Rs 273.35 crore.

For the RRBs, the total overdue amount stood at Rs 334.47 crore while for cooperative banks, the figure was Rs 2153.51 crore by the end of December 2010.