Post News Network
Bhubaneswar, August 5: Bad asset position of the banking system is likely to improve in the current financial year in the state as opening of mines coupled with possible higher manufacturing and service sector growth will help in higher recovery from non-performing asset (NPA) accounts.
As per the State Level Bankers’ Committee (SLBC) report, total NPA level stood at 8.26 per cent of the advances by the end of last fiscal. Highest NPA was recorded in agricultural term loan segment at 20.85 per cent, followed by 12.18 per cent in MSME sector. During the last financial year, NPA level was at 10.88 per cent in the priority sector, 5.28 per cent in housing loan segment and 8.40 per cent in education loan sector.
“As some of the mines resume operations in the state, it is likely to fuel higher manufacturing growth. Broader economic recovery in the domestic economy will propel growth in services sector. So, NPA level is likely to fall in the current financial year,” a banker employed with a private sector bank said. He also said that though it would take 2-3 quarters to see perceptible change in bad asset level, green shoots have already emerged in some sectors. Recently, some bankers have said that banks were increasing recovery efforts by conducting various camps.
“Bankers are increasing recovery efforts to reduce bad asset levels. Various camps are being organised which provide one-time settlement options to defaulters,” they said adding that even some loan accounts are restructured in a bid to provide more time for repayment.
