Now the Non-Performing Assets (NPAs) in agriculture and allied sector loan in Odisha are over Rs 4,100 crore and are on the rise. They account for over 13 per cent of the advances, reveals a senior official in the State Government.
While the commercial banks, regional rural banks and cooperative banks have advanced Rs 31,055 crore as per latest Banking Report on Agricultural Advances by December 31, 2017, the NPA has gone up to Rs 4,178.50 crore by this period, sources said.
Out of Rs 31,055 crore, short term crop loan is Rs 20,691 crore, term loan is Rs 6,445 crore and allied sector advance is Rs 3,918 crore.
The State Government is harping on more agricultural loans as this is a priority area of advance as stipulated by the Government of India.
While cooperative banks have advanced Rs 9,844.85 crore on short term loan, the commercial banks have advanced Rs 8,288 crore and the RRBs have provided Rs 2,558 crore.
The commercial banks have advanced Rs 5,796.83 crore in agri term loan and the RRBs have provided Rs 421.93 crore, while the cooperative banks have given Rs 226.27 crore.
In allied agriculture sector, the commercial banks have extended Rs 2,810.99 crore, the RRBs have funded Rs 885.11 crore and the cooperative banks have extended Rs 222.79 crore.
In case of agriculture loan, after poor recovery in case of Rabi crop loans, Kharif crop loans are also showing stress.
"It would be challenging to meet the agriculture lending targets this year, as there is a lot of stress in the sector,” admits a senior official in the State level Bankers’ Committee.
Officials admit that more and more bad loans are advanced by the commercial banks and the RRBs rather than the cooperative banks.
So NPAs are more with RRBs as out of total outstanding advances of Rs 3,865.16 crore, NPA is Rs 940.11 crore, which is over 24 per cent of the total agricultural advances.
This is alarming admit officials as the RRB officials are either advancing bad loans or they are not trying to take steps for recovery of loans and interest.
Similarly, the commercial banks, which have advanced Rs16,895.94 crore of agricultural loans have NPA of Rs 2,532.56 crore.
This amount comes around 15 per cent of the total advances in agriculture and allied sector.
However, the cooperative banks have advanced Rs10,293.91 crore and the NPA is Rs 705.83 crore.
Overdrive for collection of loan and interest by the State cooperative bank and other district central cooperative banks have resulted in less NPA with cooperative bank sector.
Now, with more and more State Governments implementing loan waiver, the bankers are worried in Odisha also as waiver of loan will impact overdue collection.
However, the Reserve Bank of India has already clarified that loan waiver will not impact NPA as the State Governments are making budgetary support for loan waiver in their respective State Budgets.
Recently, Karnataka announced loan waiver and earlier Uttar Pradesh implemented over Rs 35,000 crore loan waiver. If Odisha goes for full agricultural loan waiver, it will cost the State exchequer a whopping of Rs 27,000 crore, officials admit.