T2 NPAs up 29% in the state | Ahmedabad News
Ahmedabad: Gross non-performing assets (ANP) in Gujarat banks increased by 29% in the second quarter of 2021-2022, compared to the corresponding quarter of the previous year, according to the latest report of the State Level Bankers’ Committee (SLBC ) from Gujarat. The 171st SLBC meeting was held in Ahmedabad on Friday.
In the quarter ended September 30, bank NPAs increased from Rs 32,564 crore in 2020-21 to Rs 41,999 crore in 2021-22. This is due to bad debts for non-priority sector advances, from Rs 16,163 crore to Rs 24,503 crore, an increase of 51%. Loans in the non-priority sector are mainly granted to large companies.
Bankers and SLBC sources said that due to the extension of the moratorium period last year, banks did not classify accounts as NPA and as a result a massive increase was seen in the second quarter of this year.
“Last year no NPA accounts were classified by banks in accordance with RBI guidelines. In addition, many businessmen have also opted for the moratorium. As a result, a massive increase in NPAs is seen in the second quarter of this year, ”said a well-placed SLBC source.
Compared to the previous quarter, gross ANP declined slightly, signaling an economic recovery in the second quarter. Gross NPA fell from Rs 43,487 crore in the June quarter.
“The quarterly decline in NPAs signals a recovery in the economy that was observed in the second quarter. As markets fully reopen and cases of Covid-19 recede, production is increasing. Many companies were able to repay loans, resulting in a marginal drop in NPAs, ”the source added. Industry players also claim that commodity prices have risen significantly this year, which has inflated companies’ working capital needs. “The working capital requirement has almost doubled for the manufacturing industry due to the surge in commodity prices during the first two quarters of 2021-2022. Companies have thus encountered difficulties in repaying their loans. In addition, the banking standards for classifying an account as an APN have also become stricter due to the overall increase in APNs, ”said Pathik Patwari, senior vice president of the Gujarat Chamber of Commerce and Industry. (GCCI).