Demonetisation saw bank deposits in Gujarat swell by 22 per cent during the third quarter of the current fiscal, but non-performing assets (NPAs) weighed heavily on the health of banks, with bad loans crossing the Rs 30,000-crore mark.
At end of December 2016, the total deposits in banks of Gujarat stood at Rs 6.31 lakh crore, which was about 22 per cent more than the deposits that existed in the same period a year ago, stated the State Level Bankers’ Committee (SLBC) report for Gujarat. The report was released after a meeting of bankers on Tuesday.
“Demonetisation has aided banks in high accretion of deposits. The withdrawal of legal tender character of old Rs 500/1000 notes from November 9, and subsequent caps on drawing out money from banks and ATMs have left banks with additional deposits over the past two months,” stated the report. However, the “work related to demonetisation” squeezed credit growth of the banks.
During this period, the gross NPAs rose to Rs 30,698 crore. Agricultural sector and MSMEs accounted for the maximum NPAs during the September-December 2016 quarter. The NPAs in MSME sector stood at Rs 5,374 crore, while the NPAs in agriculture term loan — made available to farmers for activities other than seasonal agricultural operations like dairy, plantation and horticulture, farm mechanisation and minor irrigation — stood at Rs 2,440 crore.
In some of the nationalised banks, the gross NPAs shot through the roof. For instance, the percentage of NPAs in Indian Overseas Banks stood at 29 per cent, while that in Allahabad Bank stood at almost 26 per cent. Among the State Bank Group, the State Bank of Patiala had an NPA of 17 per cent, while among private banks, DCB Bank (31 per cent) and Dhanlaxmi Bank (22 per cent) had high percentage of NPAs as on December 2016.
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