Rising farm, MSME loans stress pushes up NPAs in Guj to 6.55%

Higher stress in farm and MSME loans pushed up gross non-performing assets of banks in Gujarat to Rs 3,995 crore, or 6.55 percent of their gross advances of Rs 6,05,879 crore as of June, according to the state-level bankers committee data. Gross NPAs in agriculture loans stood at 7.22 percent, while the same in MSMEs stood at 7.08 percent, the SLBC said here Monday.

The agency, however, did not offer the comparative numbers for last the fiscal year. "At 6.55 percent, gross NPAs in the state is not very high compared to other states. Similarly, 7.08 percent of stressed loans among MSMEs, and 7.22 percent in agriculture, are also not significantly high," VS Khichi, executive director at Bank of Baroda told reporters after the quarterly meeting in Gandhinagar.

He blamed the continued moderation in the economy for the stress in banking. "As there is continued moderation, you can always expect stress to be built. MSMEs are under a bit of continued stress, but with all the restructuring and RBI package in place, we are under control," he said. Chief minister Vijay Rupani asked bankers to come out of their traditional mindset and take an aggressive approach to lending to ensure ease of doing business.

He also urged bankers to offer easier/speedier loans to MSMEs which number around 34 lakh in the state, and also to young entrepreneurs. Mudra loan NPAs stood at 4.10 percent or Rs 450 crore out of an outstanding of Rs 10,954 crore as of August 23, SLBC said, adding Rs 3,018 crore were disbursed under the scheme from April to August 23.

Nationalised banks saw their deposits and branches coming down. While their deposits degrew by -1.88 percent, the number of branches came down by 156, mainly due to mergers. Deposits of all banks in the state grew 7.48 percent annually, at Rs 49,105 crore, it said, adding advances during the period grew by Rs 15,215 crore, registering a growth of 2.58 percent.

Seven of the 33 districts saw credit-deposit ratio falling below 40. These districts are the Dangs, Navsari, Anand, Porbandar, Kheda, Mahisagar and Tapi. The SLBC said a total 1.43 crore accounts were opened in the state as of August 23 under the Jan Dhan Yojana. Aadhar seeding of 80.68 percent accounts are completed while the average Aadhar authentication is still a low 47.56 percent, lower than the national average of 85.90 percent and 56.50 percent, respectively..

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