bu i ld i ng an i nc lu s i ve f i nanc i a l s e ctor i n i nd i a
91
4.5 NON‐PERFORMING ASSETS
According to data reported by NABARD, the overall
NPAs of bank loans to SHGs were Rs. 29.2 billion as on
31 March 2014, or 6.83 per cent of loan outstanding,
against Rs. 27.9 billion, or 7.1 per cent of loan outstand-
ing as on 31 March 2013 (Table 4.12). Thus, though
gross NPAs against bank loans to SHGs increased by
about Rs. 1.4 billion, or by a little over 5 per cent during
this period, there was a marginal decline in the ratio of
NPAs to loan outstanding. This represents a small rever-
sal of a discouraging trend which had seen an increase of
26 per cent (from Rs. 22.3 billion to Rs. 27.9 billion)
during the period 31 March 2012 to 31 March 2013.
Also gross NPAs, which had increased more than three-
fold between 31 March 2010 and 2013 (from 2.94 per
cent to 7 per cent) seems to have been levelled off for the
time being.
In regions other than the south and west the increase
in NPAs had been as much as 31 per cent to 65 per cent
between 31 March 2012 and 31 March 2013. The south-
ern region with 5.11 per cent had the lowest percentage
of NPAs as on 31 March 2013 the while central region
with 17.3 per cent had the highest. The other regions
had NPAs in the range of 8 to 12 per cent of outstanding
loans. This position has roughly been maintained in dur-
ing 2013–14. The percentage of NPAs to loan outstand-
ing in the southern region has gone down marginally to
4.69 per cent with Andhra Pradesh and Karnataka main-
taining their NPAs at a level of just over 3 per cent. In the
other regions there was a marginal rise in percentage of
NPAs. A source of continuing concern was the high NPA
percentage in major states like Madhya Pradesh, Uttar
Pradesh, and Odisha which continued to hover in the
range of 18 to 20 per cent and Tamil Nadu continuing to
report over 10 per cent of NPAs to loan outstanding as
on 31 March 2014. In Kerala, however, NPA percentage
was brought down to around 5 per cent as on 31 March
2014 from over 12 per cent the previous year.
An analysis of NPAs by type of banks (Table 4.12)
shows a degree of variation over the years and across
agencies. NPAs of commercial banks and cooperative
banks rose steadily since 2010 to reach over 8 per cent of
the total loan outstanding as on 31 March 2013. In fact,
the NPA percentage of commercial banks, which was
the lowest at 2.6 per cent of total outstanding to SHGs
as on 31 March 2010, has steadily risen each year for
three years before registering a moderate decline as on
31 March 2014 to 6.9 per cent not only in percentage
terms but also in absolute terms. This has brought down
the overall gross NPA percentage for all agencies even
though RRBs and cooperative banks continued to show
deterioration in the NPA position. RRB NPA percent-
ages, however, in recent years have been lower than for
other types of banks. In the case of cooperative banks,
the NPA percentage more than doubled from under 4
per cent in 2010 to its present level of 8.7 per cent as on
31 March 2014.
National Institute of Bank Management (NIBM) was
assigned by NABARD to conduct a study on ‘Non Per-
forming Assets (NPAs) in SHG loan portfolio of Banks’
in four districts of Uttar Pradesh (Hardoi, Gorakhpur,
Bareilly and Hamirpur) covering 500 SHGs. The objec-
tives of the study were to analyse reasons for increasing
T
ABLE
4.12
Non-performing Assets of Banks and Loans Outstanding to SHGs
Agency
2010
2011
2012
2013
2014
Amount
% of
Amount
% of
Amount
% of
Amount
% of
Amount
% of
of NPAs
NPAs
of NPAs
NPAs
of NPAs
NPAs
of NPAs
NPAs
of NPAs NPAs
(Rs.
to the
(Rs.
to the
(Rs.
to the
(Rs.
to the
(Rs.
to the
billion)
total
billion)
total
billion)
total
billion)
total
billion)
total
loan o/s
loan o/s
loan o/s
loan o/s
loan o/s
Commercial banks
5.4
2.7
10.7
4.9
16.6
6.4
21.8
8.2
20.2
6.9
Regional rural banks
2.2
3.6
2.7
3.7
4.3
5.0
4.3
4.1
6.9
6.2
Cooperative banks
0.7
3.9
1.3
7.0
1.3
6.8
1.8
8.1
2.2
8.7
Total
8.2
2.9
14.7
4.7
22.1
6.1
27.9
7.1
29.3
6.8
Source
: NABARD (2010 to 2014).
