Allahabad Bank To Focus On Npas In Agri-Sector

Allahabad Bank, in a bid to recover the large amount of non-performing assets it has in the agricultural sector, is focussing on the recovery of tractor advances. Till date, the bank has financed 22,000 tractors for Rs 166 crore, of which 6,700 cases (Rs 66 crore) have been classified as non-performing assets.

The bank has already recovered an outstanding amount of Rs 14 crore from 2,800 cases during the first half of the current financial year and is targeting another Rs 10 crore for the second half. Allahabad Bank was able to recover Rs 65 crore of non-performing assets on its total advances for the first half of the year against its recovery target of Rs 250 crore.

The banks total NPA base, which stood at 24 per cent of its total advances of Rs 1,250 crore as on March 31, 1996, is expected to increase during the current fiscal though the bank hopes to bring its non-performing assets down to 19 per cent. Credit offtake, which stood at Rs 5,233 crore as on March 1996, declined to Rs 5,076 crore during the first half of the current fiscal.

The low offtake of credit is expected to increase its NPA position to over 24 per cent. Sources told Business Standard that the bank will provide for the Rs 50 crore it had not accounted for as non-performing assets during 1995-96.

This is likely to bring down its expected net of more than Rs 100 crore this year. United Bank of India (UBI), which has the highest non-performing assets among the nationalised banks (40 per cent), is also expected to fall drastically short of its NPA recovery target of Rs 240 crore.

The bank managed to recover only Rs 70 crore of non-performing assets during the first half of the current financial year. It redeployed the recovered amount towards fresh advances

UBI currently has an NPA base of Rs 1,400 crore. With advances improving considerably, the bank hopes to bring down its non-performing assets though sources admit that non-performing assets may increase in absolute terms.