Developments in Commercial Banking (Part 2 of 3) - আৰবিআই - Reserve Bank of India
Developments in Commercial Banking (Part 2 of 3)
3.41 The turnover in the call money markets declined since the latter half of 2002-03 on account of substantial improvement in liquidity during this period for which the need to borrow came down markedly for borrowers. Also, some earlier chronic borrowers turned into occasional lenders now in this market. Further, with repo rates under LAF ruling consistently higher than call rates during April-mid October 2003, lenders have a tendency to place larger funds into Reserve Bank’s LAF, thereby depressing the turnover in the call/notice segment.
Maturity Profile of Assets and Liabilities of Banks
3.42 The maturity profile of commercial banks' liabilities continues to be relatively short, with the bulk of the deposits in the one- to three-year maturity bucket (Table III.14). In case of assets, a large part of the investment portfolio is long-term in nature, with a maturity of over five years. The portfolio of loans and advances remains relatively in line with the deposit portfolio with a sizeable part in the less than three-year maturity bucket.
Bank Stock Prices
3.43 Bank scrips, as indicated by both the recently introduced BANKEX at the BSE as well as the S&P CNX Bank Index at the NSE recorded impressive gains throughout 2002-03, notwithstanding sluggish conditions in the capital markets (Chart III.6). The market preference for bank scrips was also reflected in a sharp increase in the trading volumes of bank scrips, especially PSB scrips (Table III.15). In the capital market segment of the NSE, of the 16 listed PSBs, 9 yielded a positive daily mean return and of the 19 private banks, 14 yielded positive daily mean returns (Table III.16). While market expectations of take-overs and mergers in case of certain private sector banks and disinvestments in case of PSBs added to the sharp increase in bank stock prices, it primarily reflected the positive impact of the following two factors:
Chart III.6: Movements in Indices Bank Stocks
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Category |
2001-02 |
2002-03 |
||
Value |
Per cent to total |
Value |
Per cent to total |
|
(Rs.lakh) |
Turnover |
(Rs.lakh) |
turnover |
|
|
|
||||
1 |
2 |
3 |
4 |
5 |
|
|
||||
Public Sector Banks |
4,33,567 |
0.8 |
16, 40,648 |
2.7 |
Private Banks |
2,19,800 |
0.4 |
4,26,216 |
0.7 |
Total |
6,53,367 |
1.2 |
20,66,864 |
3.3 |
Total Turnover |
5,13,16,740 |
6,17,98,860 |
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|
|
||||
- An increase in bank profitability, especially as a result of trading profits in a regime of southward-bound interest rates, which seemed to have enhanced the sensitivity of bank stock prices to monetary policy measures during the year, such as reductions in policy rates.
- Progress of banking sector reforms, including the relaxation of foreign direct investment (FDI) norms for private sector banks.
3.44 The major gainers, in terms of average daily prices, included the Bank of Baroda, Indian Overseas Bank, Vijaya Bank, Dena Bank and the Oriental Bank of Commerce (Table III.16). The most active scrips, in terms of average daily turnover, worked out to be the State Bank of India, Syndicate Bank, ICICI Bank, Bank of Baroda and Bank of India.
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Name of the Bank |
Average Daily Closing Price (Rs.) |
|
2001-02 |
2002-03 |
|
|
|
||
1 |
2 |
3 |
|
|
||
Public Sector Banks |
||
Allahabad Bank |
— |
13.5 * |
Andhra Bank |
8.5 |
17.0 |
Bank of Baroda |
45.9 |
59.3 |
Bank of India |
16.2 |
31.2 |
Canara Bank |
— |
61.5 + |
Corporation Bank |
130.4 |
120.9 |
Dena Bank |
6.9 |
10.8 |
Indian Overseas Bank |
8.1 |
12.9 |
Oriental Bank of Commerce |
35.6 |
46.7 |
Punjab National Bank |
— |
56.1 @ |
Syndicate Bank |
9.4 |
14.6 |
Union Bank of India |
— |
20.0 # |
Vijaya Bank |
7.5 |
12.4 |
State Bank of India |
208.0 |
250.7 |
State Bank of Bikaner and Jaipur |
286.2 ** |
— |
State Bank of Travancore |
263.1 ** |
— |
Private Sector Banks |
||
Bank of Rajasthan Ltd. |
10.5 |
15.3 |
City Union Bank Ltd. |
21.3 |
30.9 |
Federal Bank Ltd. |
50.2 |
87.1 |
Jammu and Kashmir Bank Ltd. |
48.8 |
95.2 |
Karnataka Bank Ltd. |
33.8 |
61.2 |
Karur Vysya Bank Ltd. |
127.8 |
194.7 |
Laxmi Vilas Bank Ltd. |
45.9 |
65.9 |
Nedungadi Bank Ltd. |
41.5 |
34.9 ++ |
South Indian Bank Ltd. |
29.1 |
36.5 |
United Western Bank |
22.8 |
22.8 |
Vysya Bank Ltd. |
132.6 |
258.3 |
Bank of Punjab Ltd. |
12.9 |
13.9 |
Centurion Bank Ltd. |
9.3 |
8.7 |
Global Trust Bank Ltd. |
22.4 |
18.9 |
HDFC Bank Ltd. |
227.0 |
217.6 |
ICICI Bank Ltd. |
117.0 |
137.4 |
IDBI Bank Ltd. |
19.5 |
18.9 |
IndusInd Bank Ltd. |
12.5 |
15.9 |
UTI Bank Ltd. |
30.3 |
38.9 |
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|
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* From November 29, 2002; |
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+ From December 23, 2002; |
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** Up to December 27, 2001; |
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++ Up to September 30, 2002; |
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@ From April 26, 2002; |
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# From September 24, 2002. |
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Note : Averages are calculated using daily closing prices. |
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Source: National Stock Exchange. |
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3. Financial Performance of Scheduled Commercial Banks
3.45 During 2002-03, there was a significant increase in the profitability of the scheduled commercial banking system. The rise in profits was primarily driven by two factors. First, there was a significant rise in trading incomes consequent upon the easy liquidity conditions prevailing in the market which boosted 'other income' of the banking sector. Secondly, as a result of the reduction in deposit rates, the interest expended in general, and, the interest outgo on deposits, in particular, was largely contained (Table III.17).
Income
3.46 The total income of SCBs increased by 14.1 per cent in 2002-03, which was higher than the average growth rate of 12.1 per cent recorded over the period 1997-2002. Among bank groups, the increase in income was the highest for the new private bank group. Total income, in fact, declined for foreign banks due largely to a rationalisation in the number of foreign banks operating in India. The high growth in income in the new private bank category meant that the ratio of income to total assets of SCBs increased from 9.8 per cent in 2001-02 to 10.2 per cent in 2002-03. However, except for new private banks, all other bank groups registered declines in this ratio (Appendix Table III.11). The bottomline of certain PSBs also improved owing to the fact that the Reserve Bank allowed banks to recognise income on accrual basis in respect of some categories of projects under implementation which had a time overrun [Appendix Table III.12(A) to (G)].
Interest Income
3.47 Interest income comprises the major income of most bank groups. For PSBs, for instance, interest income typically comprises over 80 per cent of their total income. The two major sources of interest income are income on advances and income on investments. On account of high-interest loans contracted in the past, income on advances still comprised a major portion of interest income, accounting for around 46 per cent of interest income of PSBs in 2002-03, as compared with 50 per cent in 1997-98. Besides, there also was the impact of the larger credit off-take during the year. The other major income component for banks is income on investments. The fall in the share of interest income has been compensated, to a large extent, by the rise in income on investments. The share of this income for PSBs, which was 43 per cent in 1997-98 jumped to 47 per cent in 2002-03. Typically, the ratio of interest income to total assets of SCBs has hovered around 8.3 per cent during the last five years.
3.48 The composition of commercial bank assets has been changing in recent years in response to the prevalence of easy liquidity conditions, driven by strong capital flows on the supply side and weak credit off-take on the demand side as well as the tightening of prudential norms. As a result, the rate of accretion to investments was higher than that of earning advances (i.e., advances, net of NPAs) during 1997 to 2003. The composition of income has also been changing in response to the changes in asset patterns and the underlying macroeconomic conditions. The share of interest on advances in total income has been declining, reflecting both the slower expansion of credit as well as the softening of interest rates. The share of interest income from investments in total income, on the other hand, increased because of the larger pool of investments, partly offset by the decline in yields.
Other Income
3.49 The other major component of income is income generated from fee-based activities such as those from commission and brokerage, profit on sale of land, building as well as net income arising out of exchange transactions. Of these, commission, exchange and brokerage typically comprise the major part of other incomes. Recent years have, however, witnessed significant gains to banks, primarily PSBs and to a lesser extent, private banks, owing to their sharp rise in trading incomes. The deepening of Government securities markets coupled with the sustained decline in yields resulted in a sharp increase in profits from sale of investments. The issue has, therefore, arisen as to whether the treasury is the major source of bank income (Box III.3). In fact, in 2002-03, trading incomes of PSBs increased by nearly 65 per cent over the previous year, reflecting the gains made on this account by almost all banks, with a virtual quadrupling of trading income in case of certain banks. Forex income, on the other hand, has traditionally been high in case of the foreign bank group, reflecting their high off-balance sheet activities, primarily forward exchange contracts. Public sector banks have also recorded substantial forex income over the last two years.
Expenditure
3.50 The expenditure of SCBs clocked a growth of 11.4 per cent in 2002-03, lower than the average annual growth of 11.7 per cent witnessed over the period 1997-2002. Among bank groups, foreign banks witnessed a sharp containment in their expenses arising from the three factors: (a) significant reduction in their interest expenses,
(b) containment of their wage costs, and (c) lowering of provisions and contingencies; all these led to a lowering of the overall expenditure to asset ratio to 8.8 per cent from 10.1 per cent a year earlier. Other bank groups also experienced a significant reduction in overall expenses arising from the containment of interest expenses and operating expenses. An exception was, however, the new private banks whose expenses increased markedly, reflecting partly the rise in interest expenses (interest on notes and bonds issued, effected in the earlier year) and partly on account of a rise in operating expenses.
Interest Expenditure
3.51 Interest on deposits comprises the major component of interest expense. For PSBs, this accounted for around 65 per cent of total expenditure and over 90 per cent of interest expense over the last five years. For foreign banks, interest on deposits, both as percentage of total expenses, as well as interest expenses, is much lower than their counterparts in the public and private sectors. Over the last few years, in tandem with the fall in interest rates across the board and the introduction of floating rate deposits by the Reserve Bank, there have been significant declines in interest expenses across all categories of banks. This is reflected in the fact that the share of interest expense has witnessed a noticeable decline for most bank groups. Illustratively, for PSBs, the share of interest expenses in total expenses, which was over 65 per cent in 1997-98 has come down to about 60 per cent in 2002-03. Similar declines were evidenced for most other bank groups as well.
Operating Expenses
3.52 Operating expenses comprise, among others, wage expenses and non-wage expenses such as rent, taxes and lighting, advertisement, directors' fees and allowance and legal charges. For most bank groups, operating expenses registered marginal increases, especially in case of PSBs on account of higher depreciation, audit fees and expenses on account of repairs and maintenance. Additionally, the charging of retirement benefit relating to leave encashment led to a rise in wage expenses in several PSBs. Foreign banks, on the other hand, witnessed a reduction in operating expenses indicating a containment in their wage bill, which is generally low among bank groups. Given the gradual lowering of operating expenses across bank groups, for SCBs as a whole, operating expenses to total assets witnessed a declining trend over the last few years.
Wage Bill
3.53 Payments to and provision for employees is a major item of operating expenses, especially for PSBs and comprised around 20 per cent of their total expenses over the last few years. The share of the wage bill increased in 2000-01, wherein the voluntary retirement scheme (VRS) introduced in PSBs sharply increased their wage bill and consequently, their operating expenses as well. The enlargement in the wage bill over the period 1997-2001 for PSBs was 12.5 per cent, and inclusive of 2001-02, was 8.6 per cent. The rationalisation of manpower following the VRS has sharply curtailed the wage bill of PSBs and brought down its share in total expenses to around 17 per cent. The share, however, continues to remain high on account of higher contributions to provident funds, gratuity fund and provision for leave encashment facility. The share of the wage bill in total expenses for most other bank groups is markedly lower, ranging from around 13 per cent in old private banks to less than 5 per cent in new private banks in 2002-03. In fact, the more technology-intensive new private and foreign banks tend to have a much lower proportion of the wage bill in total expenses as compared with their old private and public sector counterparts.
Provisions and Contingencies
3.54 The major items on provisions and contingencies consist of provisions for loan losses, provisions for depreciation in value of investments and provisions for taxes. Provisions typically constitute around 10-12 per cent of total expenses of SCBs, but there is a marked variation across bank groups. Owing to their higher non-performing assets reflecting the past legacy, PSBs generally have higher loan loss provisions in absolute terms than foreign banks, for whom it is generally on the lower side, due to the their better overall asset quality. All bank groups and PSBs, in particular, witnessed sharp increases in provisions, and especially in loan loss provisions, both in percentage terms and also as ratio to total expenses. Apart from the ad hoc general provisions made for the impending 90-day delinquency norms, the provision on standard assets on global portfolio basis, introduced effective end-March 2000, has raised overall provisioning levels. The international experience with regard to provisioning is generally supportive of the fact that loan loss provisions tend to be counter-cyclical (Box III.4).
Operating Profits
3.55 As on March 31, 2003, the operating profits of SCBs exhibited a growth of 36 per cent over the previous year, far higher than the annual average growth rate of 16 per cent recorded over the last six years. In fact, the operating profits of SCBs witnessed their highest growth in 2002-03, leaving aside the new private banks, for whom the growth was the highest owing to the inclusion of a new private bank and the lead effect of a merger in the earlier year. As a result, the operating profit to total assets of PSBs, which generally has been in the range of 1.4-1.8 per cent, jumped to 2.3 per cent in 2002-03. The ratio also witnessed a sharp rise in the case of new private banks and a marginal rise in case of foreign banks. For old private banks, the ratio has stayed roughly at the same level as in the earlier year, although it is much higher than those in the preceding three years.
Net Profit
3.56 Net profits of SCBs increased by nearly 50 per cent in 2002-03, on top of a rise of 81 per cent in the previous year. Among bank groups, the increase in net profit was the highest for new private banks, although most other bank groups also registered substantial increases (Chart III.7). Within the PSB group, the increase was much higher in case of nationalised banks as compared with the State Bank group. This was due largely to the large non-interest incomes generated from treasury operations. In recent times, treasury operations have emerged as a major profit centre for Indian banks, with a significant increase in 2002-03 as compared with 2001-02. Forex incomes, although not as large as treasury income, have also been contributing significantly to bank's operating profits in recent years, despite the pressure on margins and the thinning of inter-bank spreads (Table III.18 and Appendix Table III.13).
(Rs. crore) |
|||||||
|
|
|||||||
Bank Group |
Trading Income |
Forex Income |
Operating Profit |
||||
2001-02 |
2002-03 |
2001-02 |
2002-03 |
2001-02 |
2002-03 |
||
|
|
|||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
|
|
|
|||||||
Scheduled Commercial Banks |
9,541 |
13,245 |
2,464 |
2,813 |
29,837 |
40,682 |
|
Public Sector Banks |
5,999 |
9,924 |
1,547 |
1,672 |
21,677 |
29,715 |
|
Nationalised Banks |
4,965 |
7,249 |
998 |
1,035 |
12,957 |
18,486 |
|
State Bank Group |
1,034 |
2,675 |
549 |
638 |
8,720 |
11,229 |
|
Old Private Sector Banks |
1,408 |
1,466 |
113 |
123 |
2,516 |
2,804 |
|
New Private Sector Banks |
1,109 |
1,351 |
135 |
129 |
2,131 |
4,434 |
|
Foreign Banks |
1,024 |
504 |
668 |
888 |
3,514 |
3,728 |
|
|
|
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Notes : |
1. Trading Income - Net Profit on Sale of Investment. |
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2. Forex Income - Net Profit on Exchange Transaction. |
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Trends during the First Quarter of 2003-04
3.57 The performance of the commercial banking system during the quarter ended June 2003 has been analysed based on off-site returns of domestic transactions of SCBs. The data reveals a significant improvement in performance of SCBs over the corresponding period of June 2002. The net profits to total assets of SCBs for the quarter ended June 2003 stood at 0.32 per cent as compared with 0.24 per cent for the quarter ended June 2002. The improvement in net profits was driven by a containment in expenses in general, and interest expended, in particular, despite a sharp rise in provisions and contingencies across bank groups. Operating expenditures, by and large, remained at the same level for the quarter ended June 2002; an exception being the new private banks for whom these expenses increased owing to a rise in the wage bill.
3.58 The international experience suggests that bank profitability was low in 2002, but generally remained adequate given the poor economic backdrop. There are, however, diverse developments across countries (Table III.19).
(As per cent of total assets) |
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Country |
Pre-tax profits |
Provisioning |
Net interest |
Operating costs |
|||||
expenses |
Margin |
||||||||
2001 |
2002 |
2001 |
2002 |
2001 |
2002 |
2001 |
2002 |
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|
|
|||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
|
|
|
|||||||||
United States (10) |
1.49 |
1.66 |
0.71 |
0.72 |
3.10 |
3.11 |
4.06 |
3.46 |
|
Japan (12) |
-0.93 |
0.04 |
1.36 |
0.28 |
1.14 |
0.81 |
1.20 |
0.82 |
|
Germany (4) |
0.14 |
0.05 |
0.24 |
0.39 |
0.90 |
0.80 |
1.62 |
1.50 |
|
United Kingdom (4) |
1.27 |
1.11 |
0.31 |
0.36 |
2.07 |
2.02 |
2.48 |
2.40 |
|
France (4) |
0.74 |
0.58 |
0.22 |
0.20 |
0.94 |
1.03 |
1.87 |
1.81 |
|
Italy (6) |
0.81 |
0.48 |
0.55 |
0.67 |
2.04 |
2.16 |
2.39 |
2.61 |
|
Spain (4) |
1.20 |
0.93 |
0.44 |
0.49 |
2.86 |
2.66 |
2.60 |
2.37 |
|
Canada (6) |
0.92 |
0.51 |
0.41 |
0.59 |
1.95 |
2.06 |
2.84 |
2.76 |
|
Sweden (4) |
0.82 |
0.70 |
0.10 |
0.09 |
1.49 |
1.48 |
1.51 |
1.44 |
|
Memo: |
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India* |
0.49 |
0.75 |
1.03 |
1.19 |
2.85 |
2.57 |
2.64 |
2.19 |
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* Pertain to 100 scheduled commercial banks in 2001 and 97 for 2002. Financial year is April-March. The profit figure refers to net profits. |
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Note: |
1. Figures are a percentage to total assets. |
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2. Figures in brackets indicate number of major banks included. |
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Source: BIS Annual Report (2003). |
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3.59 The focus of the reform process in India has been on improving the productivity, efficiency and profitability of the banking system. In fact, raising the efficiency levels through greater manpower productivity and increased deployment of technology in order to reduce transactions cost has been at the core of the banking sector reform process. Attempts have, therefore, been underway to consolidate the gains of earlier reform measures. In this context, the issue has arisen whether there have been the efficiency gains consequent upon the reform measures in the financial sector (Box III.5).
Off-Balance Sheet Activities
3.60 Off-balance sheet activities of SCBs, comprising forward exchange contracts, guarantees, acceptances and endorsements, rose sharply in 2002-03 (Appendix Table III.14). Accordingly, the share of off-balance sheet operations in terms of total liabilities increased to nearly 69 per cent in 2002-03. Out of this, nearly three-fourths were forward exchange contracts, mostly related to exports and imports.
3.61 Foreign banks were particularly active in off-balance sheet activities with the result that the ratio of their off-balance sheet activity to total liabilities rose from 394 per cent in 2001-02 to 483 per cent in 2002-03.
Cost of Funds
3.62 Prudent resource management within a sound asset-liability management framework has lowered the cost of funds across bank groups (Table III.20). Falling interest rates have meant that both the return on advances and investments have come down across bank groups. For new private sector banks, the interest paid on both deposits and borrowings have been higher reflecting, inter alia, the lagged effect of the inclusion of a new private bank with high borrowings, as also the inclusion of a new scheduled bank operational since March 2003. These factors, consequently, led to a rise in the cost of funds for this bank group.
(per cent) |
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Variable/ |
Public Sector |
Old Private Sector |
New Private Sector |
Foreign Banks |
|||||
Bank Group |
Banks |
Banks |
Banks |
||||||
|
|
|||||||||
2001- |
2002- |
2001- |
2002- |
2001- |
2002- |
2001- |
2002- |
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|
|
|||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
|
|
|
|||||||||
Cost of Funds |
6.8 |
6.1 |
7.6 |
6.6 |
3.8 |
4.4 |
6.2 |
5.3 |
|
Return on Advances |
9.6 |
9.0 |
10.9 |
9.7 |
4.7 |
10.3 |
11.0 |
10.3 |
|
Return on Investments |
10.2 |
9.2 |
10.5 |
9.2 |
5.8 |
8.2 |
10.5 |
7.7 |
|
|
|
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Notes : |
1. Cost of funds = (Interest Paid on Deposits+Interest Paid on Borrowings)/(Deposits+Borrowings). |
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2. Return on Advances = Interest Earned on Advances / Advances. |
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3. Return on Investments = Income on Investment / Investment. |
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Spread
3.63 The spread of SCBs increased by 19.5 per cent in 2002-03. Most bank groups, recorded a double-digit increase in spread arising largely from the containment in interest expenditure in a softer interest regime. Spreads of foreign banks are typically higher than their public sector and private counterparts, owing to their lower interest costs on deposits. The substantial increase in spreads meant that the spread to total assets ratio increased significantly for most bank groups. However, the ratio of spread to total assets has continually been shrinking for most bank groups as yields on assets have declined more than proportionately vis-à-vis the cost of liabilities6.
Investment Fluctuation Reserve
3.64 Banks were advised to build up the Investment Fluctuation Reserve (IFR) of a minimum of five per cent of the investment held in the 'Available for Sale' (AFS) and 'Held for Trading' (HFT) categories of the investment portfolio within a period of five years commencing from the year ended March 31, 2002. The bank group-wise position reveals that, as at end-March 2003, while SCBs had built up an IFR ratio (defined as IFR as percent of investments under AFS and HFT categories, taken together) of 1.8 per cent, the IFR ratios of certain bank groups have been higher than this figure (Table III.21 and Appendix Table III.18). New private sector banks were observed to be lagging behind in respect of their IFR position. The bank-wise position in respect of PSBs reveals that several of them have made substantial progress and built up a comfortable IFR ratio since the Reserve Bank advised banks on this issue in January 2002. While banks are required to build up an IFR portfolio of a minimum of five per cent of their investments within a period of five years, it is observed that 17 PSBs had already built up IFR ratio of 2.0 per cent or more.
3.65 The large policy-induced changes in the interest rate environment have brought forth the issue of interest rate sensitivity of banks' balance sheet. The impact on the bottomline of banks, under such circumstances, is likely to depend on whether the future interest rate movement is in tandem with the banks' respective interest rate expectations. Building up an adequate cushion, as entailed in the IFR, in a benign interest rate environment, is likely to mitigate the adverse effects of interest rate movement (Box III.6).
4. Non-performing Assets7
3.66 Credit risk is an important factor impinging on financial entities. The solvency crisis of financial systems, such as the American Savings and Loan crisis in the 1980s, the Nordic banking crisis at the beginning of the 1990s and more recently, the banking sector problems in Japan and Turkey have, in large measure, been a consequence of accumulation of problem loans over time. In order to contain the growth in non-performing assets (NPAs), recovery management has become a keyword for the banking industry in recent years. In the Indian context, several initiatives have been taken by the Reserve Bank in conjunction with the Government to contain the NPAs of banks. As a consequence, NPAs of SCBs have witnessed a secular decline since the initiation of income recognition and asset classification (IRAC) norms. It is instructive to turn to the relevant empirical and theoretical literature revealing the factors behind the credit risk (Box III.7).
3.67 The decline in NPAs has also been evidenced across bank groups, except in 2000-01. In line with this declining trend, NPAs declined sharply in 2002-03, reflecting, inter alia, the salutary impact of earlier measures towards NPA reduction and the enactment of the SARFAESI Act ensuring prompter recovery without intervention of court or tribunal (Box III.8). The progress under this Act has been significant, as evidenced by the fact that during 2002-03, reductions outpaced addition, especially for PSBs and reflected in an overall reduction of non-performing loans to 9.4 per cent of gross advances from 14.0 per cent in 1999-2000 (Table III.22 to Table III.25). The bank-wise gross/ net NPAs as percentage to advances/assets are provided in Appendix Tables III.19 (A) to 19(F). Sector-wise NPAs of individual public and private sector banks are presented in Appendix Tables III.20(A) and 20(B).
Table III.22: Bank Group-Wise Gross and Net Npas of Scheduled Commercial Banks |
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(as at end-March) |
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(Amount in Rs. crore) |
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|
|
|||||||||
Bank Group/Year |
Gross |
Gross NPAs |
Net |
Net NPAs |
|||||
Advances |
Amount |
Per cent |
Per cent |
Advances |
Amount |
Per cent |
Per cent |
||
To Gross |
to total |
To Net |
to total |
||||||
Advances |
Assets |
Advances |
Assets |
||||||
|
|
|||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
|
|
|
|||||||||
Scheduled Commercial Banks |
|||||||||
2000 |
4,75,113 |
60,408 |
12.7 |
5.5 |
4,44,292 |
30,073 |
6.8 |
2.7 |
|
2001 |
5,58,766 |
63,741 |
11.4 |
4.9 |
5,26,328 |
32,461 |
6.2 |
2.5 |
|
2002 |
6,80,958 |
70,861 |
10.4 |
4.6 |
6,45,859 |
35,554 |
5.5 |
2.3 |
|
2003 |
7,78,043 |
68,714 |
8.8 |
4.0 |
7,40,473 |
32,764 |
4.4 |
1.9 |
|
Public Sector Banks |
|||||||||
2000 |
3,79,461 |
53,033 |
14.0 |
6.0 |
3,52,714 |
26,187 |
7.4 |
2.9 |
|
2001 |
4,42,134 |
54,672 |
12.4 |
5.3 |
4,15,207 |
27,977 |
6.7 |
2.7 |
|
2002 |
5,09,368 |
56,473 |
11.1 |
4.9 |
4,80,681 |
27,958 |
5.8 |
2.4 |
|
2003 |
5,77,813 |
54,086 |
9.4 |
4.2 |
5,49,351 |
24,963 |
4.5 |
1.9 |
|
Old Private Sector Banks |
|||||||||
2000 |
35,404 |
3,815 |
10.8 |
5.2 |
33,879 |
2,393 |
7.1 |
3.3 |
|
2001 |
39,738 |
4,346 |
10.9 |
5.1 |
37,973 |
2,771 |
7.3 |
3.3 |
|
2002 |
44,057 |
4,851 |
11.0 |
5.2 |
42,286 |
3,013 |
7.1 |
3.2 |
|
2003 |
51,329 |
4,568 |
8.9 |
4.3 |
49,436 |
2,741 |
5.5 |
2.6 |
|
New Private Sector Banks |
|||||||||
2000 |
22,816 |
946 |
4.1 |
1.6 |
22,156 |
638 |
2.9 |
1.1 |
|
2001 |
31,499 |
1,617 |
5.1 |
2.1 |
30,086 |
929 |
3.1 |
1.2 |
|
2002 |
76,901 |
6,811 |
8.9 |
3.9 |
74,187 |
3,663 |
4.9 |
2.1 |
|
2003 |
94,718 |
7,232 |
7.6 |
3.8 |
89,515 |
4,142 |
4.6 |
2.2 |
|
Foreign Banks |
|||||||||
2000 |
37,432 |
2,614 |
7.0 |
3.2 |
35,543 |
855 |
2.4 |
1.0 |
|
2001 |
45,395 |
3,106 |
6.8 |
3.0 |
43,063 |
785 |
1.8 |
0.8 |
|
2002 |
50,631 |
2,726 |
5.4 |
2.4 |
48,705 |
920 |
1.9 |
0.8 |
|
2003 |
54,184 |
2,829 |
5.2 |
2.4 |
52,171 |
918 |
1.8 |
0.8 |
|
|
|
|||||||||
Source: |
1. Balance sheets of respective banks. |
||||||||
2. Returns submitted by respective banks. |
|||||||||
Movements in Provisions for Non-performing Assets
3.68 With effect from the year ended March 2002, banks were directed to submit additional returns as part of Notes on Accounts in their balance sheet relating to (a) movements in provisions for non-performing loans, and (b) movements in provisions for depreciation in investments. A major part of SCBs’ total provisions was accounted for by PSBs, which accounted for 47.2 per cent of gross NPAs as at end-March 2003. For the State Bank group, provisions were lower than that in the previous year reflecting an improvement in their asset quality. Foreign banks, inspite of their improved asset quality vis-à-vis other banks, typically had higher provisions (Table III.26).
Table III.23: Bank Group-Wise Movements in Non-Performing Assets - 2002-03 |
|||||
(Amount in Rs.crore) |
|||||
|
|
|||||
Particular |
Scheduled |
Public Sector |
Old Private |
New Private |
Foreign |
Banks (93) |
Banks (27) |
Banks (21) |
Banks (9) |
Banks (36) |
|
|
|
|||||
1 |
2 |
3 |
4 |
5 |
6 |
|
|
|||||
Gross NPAs |
|||||
As at end-March 2002 |
70,153 |
56,473 |
4,389 |
6,821 |
2,469 |
Additions during the year |
21,863 |
16,065 |
1,625 |
2,649 |
1,523 |
Reductions during the year |
23,302 |
18,452 |
1,447 |
2,239 |
1,164 |
As at end-March 2003 |
68,714 |
54,086 |
4,568 |
7,232 |
2,829 |
Net NPAs |
|||||
As at end-March 2002 |
35,256 |
27,958 |
2,775 |
3,663 |
860 |
As at end-March 2003 |
32,764 |
24,963 |
2,741 |
4,142 |
918 |
Memo: |
|||||
Gross Advances |
7,78,043 |
5,77,813 |
51,329 |
94,718 |
54,184 |
Net Advances |
7,40,473 |
5,49,351 |
49,436 |
89,515 |
52,171 |
Ratio |
|||||
Gross NPA/Gross Advances |
8.8 |
9.4 |
8.9 |
7.6 |
5.2 |
Net NPA/Net Advances |
4.4 |
4.5 |
5.5 |
4.6 |
1.8 |
|
|
|||||
Note : Figures in brackets indicates the number of banks in that category for the year 2002-03. |
|||||
Source : Balance sheets of respective banks. |
|||||
Table III.24: Classification of Loan Assets of Scheduled Commercial Banks-Bank Group-Wise |
||||||||||||
(Amount in Rs.crore) |
||||||||||||
|
|
||||||||||||
Bank Group/ |
Standard Assets |
Sub-standard |
Doubtful Assets |
Loss Assets |
Total NPAs |
Total |
||||||
Year |
Assets |
Advances |
||||||||||
Amount |
Per |
Amount |
per |
Amount |
Per |
Amount |
per |
Amount |
per |
Amount |
||
Cent |
cent |
Cent |
cent |
cent |
||||||||
|
|
||||||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
|
|
|
||||||||||||
Scheduled Commercial Banks |
||||||||||||
2000 |
4,14,917 |
87.2 |
19,594 |
4.1 |
33,688 |
7.1 |
7,558 |
1.6 |
60,840 |
12.8 |
4,75,757 |
|
2001 |
4,94,716 |
88.6 |
18,206 |
3.3 |
37,756 |
6.8 |
8,001 |
1.4 |
63,963 |
11.4 |
5,58,679 |
|
2002 |
6,09,972 |
89.6 |
21,382 |
3.1 |
41,201 |
6.0 |
8,370 |
1.2 |
70,953 |
10.4 |
6,80,925 |
|
2003 |
7,09,260 |
91.2 |
20,078 |
2.6 |
39,731 |
5.1 |
8,971 |
1.2 |
68,780 |
8.8 |
7,78,040 |
|
Public Sector Banks |
||||||||||||
2000 |
3,26,783 |
86.0 |
16,361 |
4.3 |
30,535 |
8.0 |
6,398 |
1.7 |
53,294 |
14.0 |
3,80,077 |
|
2001 |
3,87,360 |
87.6 |
14,745 |
3.3 |
33,485 |
7.6 |
6,544 |
1.5 |
54,774 |
12.4 |
4,42,134 |
|
2002 |
4,52,862 |
88.9 |
15,788 |
3.1 |
33,658 |
6.6 |
7,061 |
1.4 |
56,507 |
11.1 |
5,09,369 |
|
2003 |
5,23,724 |
90.6 |
14,909 |
2.6 |
32,340 |
5.6 |
6,840 |
1.2 |
54,089 |
9.4 |
5,77,813 |
|
Old Private Sector Banks |
||||||||||||
2000 |
31,447 |
88.8 |
1,577 |
4.5 |
2,061 |
5.8 |
347 |
1.0 |
3,985 |
11.2 |
35,432 |
|
2001 |
35,166 |
88.7 |
1,622 |
4.1 |
2,449 |
6.2 |
413 |
1.0 |
4,484 |
11.3 |
39,650 |
|
2002 |
39,262 |
89.0 |
1,834 |
4.2 |
2,668 |
6.1 |
348 |
0.8 |
4,850 |
11.0 |
44,112 |
|
2003 |
46,761 |
91.1 |
1,474 |
2.9 |
2,772 |
5.4 |
321 |
0.6 |
4,567 |
8.9 |
51,328 |
|
New Private Sector Banks |
||||||||||||
2000 |
21,870 |
95.9 |
560 |
2.5 |
294 |
1.3 |
92 |
0.4 |
946 |
4.1 |
22,816 |
|
2001 |
29,905 |
94.9 |
963 |
3.1 |
620 |
2.0 |
11 |
0.0 |
1,594 |
5.1 |
31,499 |
|
2002 |
70,010 |
91.2 |
2,904 |
3.8 |
3,871 |
4.9 |
41 |
0.0 |
6,816 |
8.8 |
76,826 |
|
2003 |
87,487 |
92.4 |
2,700 |
2.9 |
3,675 |
3.9 |
856 |
0.9 |
7,231 |
7.6 |
94,718 |
|
Foreign Banks |
||||||||||||
2000 |
34,817 |
93.0 |
1,096 |
2.9 |
798 |
2.1 |
721 |
1.9 |
2,615 |
7.0 |
37,432 |
|
2001 |
42,285 |
93.1 |
876 |
1.9 |
1,202 |
2.6 |
1,033 |
2.3 |
3,111 |
6.9 |
45,396 |
|
2002 |
47,838 |
94.5 |
856 |
1.7 |
1,004 |
2.0 |
920 |
1.8 |
2,780 |
5.5 |
50,618 |
|
2003 |
51,288 |
94.7 |
995 |
1.8 |
944 |
1.7 |
954 |
1.8 |
2,893 |
5.3 |
54,181 |
|
|
|
||||||||||||
Notes |
: 1. The figures furnished in this table may not tally with the data in Table III.22 due to different sources of data collection. |
|||||||||||
2. Figures are provisional. |
||||||||||||
3. Constituent items may not add up to the totals due to rounding off. |
||||||||||||
Source |
: Returns submitted by respective banks. |
|||||||||||
এই পৃষ্ঠাটো শ্বেয়াৰ কৰক:
ভাৰতীয় ৰিজাৰ্ভ বেংক মোবাইল এপ্পলিকেষ্যন ইনষ্টল কৰক আৰু নৱীনতম বাতৰিৰ প্ৰৱেশাধিকাৰ পাওক!
