low recovery of loans is dampening the mood of bankers who derided the poor recovery and higher Non-performing Asset (NPA) as a result of that in Jharkhand compared to the national average. In the 48th meeting of State level Bankers’ Committee (SlBC) conducted here, the committee requested the State Government to pay attention to rising NPAs.
“Rising NPA is a cause of concern for bankers. If recovery is good loan disbursement will also be good,” said Executive Director of Bank of India, BP Sharma.
The SlBC has expressed its desire to get the backing of legislation to improve the NPA figures which is hovering around 6 per cent and is worse than neighbouring States as stated by bankers during the meeting. The committee suggested control measures for recovery of NPA accounts, arresting slippages, increasing number of certificate officers to expedite certificate cases and permission for physical possession under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (SARFAESI) 2002. The act allows banks and financial institutions to auction properties—residential and commercial-- when borrowers fail to repay their loans. It helps a bank in addressing NPAs by adopting measures for recovery or reconstruction. However, legislations backing recovery are unlikely until the next assembly is constituted in Jharkhand.
“Two Acts-money lender act and acts related to certificate cases could be made only by next government,”
maintained Finance Secretary AP Singh.
However, the meeting exposed the procrastination on the part of banks in distributing Kishan Credit Cards (KCC) to farmers. The bankers had to eat a humble pie for failing to expand the coverage of KCC in Jharkhand and like previous meeting vowed to improve coverage in Jharkhand. Notably, each bank had to adopt one village for KCC project besides improving figure for the rest of Jharkhand however the promises of a total coverage fell flat. The Agriculture department asked the SlBC to update them with the information about KCC disbursement so as to enable them monitoring of the farmer friendly scheme.
“Right now KCC coverage is around 17.75 per cent but we have set a target of 18 per cent by the end of March 2015,” pointed out Sharma.
Significantly, the SlBC patted the banks operating in Jharkhand for showing a meager year-on-year (YoY) growth of 4 per cent in credit flow to women, YoY growth of 3.31 per cent in credit flow to SC/ST. But banks have failed to improve the credit off-take
figure in housing sector and education loan.
The meeting was participated by senior government officials and bankers operating in Jharkhand.