Bad loans in Gujarat rose by Rs 2,000 crore year over year

AHMEDABAD: While banks strive to curb bad loans, gross non-performing assets (NPA) in

Gujarat

increased in the last year.

According to the quarterly report by the State Level Bankers’ Committee (SLBC), gross NPAs stood at Rs 37,342 crore in Gujarat in the first quarter of financial year 2018-19, which ended in June.

Bad loans thus increased by Rs 2,000 crore, against the corresponding quarter of financial year 2017-18, when gross NPAs stood at Rs 35,342 crore.

Total advances by banks across the state, was Rs 5.46 lakh crore in the first quarter of FY 2018-19, which grew from Rs 4.77 lakh crore in the same quarter of FY 2017-18. While gross NPAs increased in absolute terms, the ratio of non-performing assets to outstanding declined in FY 2018-19 to 6.9% against 7.4%.

Bad loans in the quarter that ended in June 2018, increased by Rs 2,122 crore from the quarter that ended in March 2018, when gross non-performing assets stood at Rs 35,220 crore against total advances of Rs 5.39 lakh crore.

At the same time, the ratio of NPAs to outstanding also rose marginally in the first quarter of FY 2018-19, against 6.53% in the quarter that ended in March 2018.

Bankers says they are under pressure to clear their account books.

“While most sectors have recovered from the impact of the transition to goods and services tax (GST), certain sectors continue to remain stressed, including micro, small and medium enterprises (MSMEs). Delayed payments and long cycles among MSMEs are key reasons that force them to default on payments,” said a top source, on condition of anonymity.