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Non-performing assets (NPAs) of banks in Odisha has climbed to 8.78 per cent of total advances by the end of December 2014 due to high slippages in agriculture and education loans.
NPA rate in the state is the highest in case of agriculture term loans pegged at 19.38 per cent while for the overall agriculture sector, it is 13.06 per cent. Education loan is next only to agriculture sector in contributing to stressed bank assets. The NPA of education sector stood at 10.12 per cent.
The MSME (micro, small & medium enterprises) sector and housing sector have NPAs of 8.93 per cent and 4.58 per cent respectively. NPAs in total priority sector is 11.20 per cent, according to data compiled by State Level Bankers' Committee (SLBC).
NPA refers to loans that are in jeopardy of default. Loans are classified as NPAs if the borrower has failed to make interest or principal payments for 90 days.
The SLBC has expressed concern on the rising bad loans in the state.
"For Prime Minister's Rozgar Yojana (PMRY), Prime Minister's Employment Generation Programme (PMEGP), Swarna Jayanti Shahari Rozgar Yojana (SJSRY), Self Help Groups (SHG) and Weaver Credit Card (WCC), the recovery performance, the NPA and overdue percentage are too high, which can only be rated as unsatisfactory", said the latest report of SLBC.
NPA rates for PMRY/PMEGP, SHG, SJSRY and WCC are 34.31 per cent, 21.50 per cent, 20.23 per cent and 20.23 per cent respectively. The banks are unable to recycle the funds owing to non repayment of loans and rising NPA percentage. The banks and government departments have to make joint endeavour with specific strategies to improve the recovery performance for better recycling of funds, added the report. The SLBC has requested the state government to constitute a recovery mechanism to help the banks for encouraging credit flow the different sectors. Similarly, the overdue per cent is alarmingly high at 51.91 per cent at the end of December quarter.
Any amount due to the bank under any credit facility, if not paid by the due date fixed by the bank becomes overdue.
Under the Odisha Public Demands Recovery Act (OPDR), 12391 cases involving Rs 124.82 crore are pending for disposal by the certificate courts.
SLBC has suggested the state government to follow the public demand Act of Uttar Pradesh, Madhya Pradesh, Rajasthan for improving recovery under the different government schemes.
The state government has proposed to include all schemes requiring composite loan sponsored by district industries centre as well as subsidy and interest subvention linked schemes implemented in the state by the different departments and financed by banks operating in the state under the OPDR Act.
