(a) whether Non Performing Assets of Urban Co-operative Banks have been
increasing over the last several years ;
(b) if so, the details of NPAs of UCBs during the last year, year-wise, State-wise
showing debt, slab wise number of NPA debtors account e.g. number of accounts
in Rs.50,000 debt slab, Rs. 1,00,000, Rs.2,00,000 and so on ;
(c) the reasons for increase in NPAs and failure of recovery; and
(d) the steps contemplated, for recovery of NPAs within a specific time-frame ?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI S.S.PALANIMANICKAM)
(a): No specific trend in increase/decrease of Non Performing Assets(NPAs) is
established by the following data of gross and net NPAs of Urban Cooperative
Banks(UCBs) for the last five years: -
(b) : The data reporting system of RBI does not capture /generate slab-wise data
of NPAs as called for. However, the details of state-wise NPAs of Urban Cooperative
Banks for the year 2004-05 are furnished at Annexure.
(c) : The reasons for increase in NPAs and low recovery, inter-alia, include - Normal
business failure ;
Cyclical nature of certain industries resulting in business downturn,Outbreak of natural
calamities ;
Lack of sound lending policies and non-adherence to guidelines/instructions
issued by RBI from time to time ;
Poor quality of pre-sanction appraisal/post-sanction supervision of loans and advances
granted by banks;
Excessive exposure to certain sectors: Sanctioning of unsecured loans to firms/companies
connected to share/stock brokers in violation of RBI guidelines and Unauthorised credit
facilities extended, Diversion of funds out of business, Lack of security and Pending court
cases etc.
(d) : Several steps have been taken to encourage recovery of loans UCBs have been
advised to initiate penal measures against willful defaulters, implement a scheme of One
Time Settlement of NPAs on the lines of draft scheme approved by RBI;
UCB`s have been brought under the purview of the Securitisation Act in January 2003 ;
Ban has been issued on loans and advances to directors(except in certain cases): UCBs
are not allowed to extend credit facilities to stock/share brokers against shares/debentuxes/
bonds etc.