Chapter II

2.67 There was a perceptible decline in the ratio of gross NPAs and net NPAs, measured as percentage to advances as well as assets. For example, the ratio of gross NPAs to gross advances for SCBs declined from 11.4 per cent as at end of March 2001 to 10.4 per cent as at end of March 2002; net NPA to net advances, over the same period, declined from 6.2 per cent to 5.5 per cent. As percentage to total assets, gross NPAs declined from 4.9 per cent at end-March 2001 to 4.6 per cent at end-March 2002. Bank-wise details of NPA ratios for PSBs and private sector banks are given in Appendix Table II.9 (A) to (D). Sector-wise NPAs of individual public and private sector banks are presented in Appendix Tables II.10 (A) and (B) and Chart II.8. The movement in NPAs across bank groups is provided in Table II.17. The NPAs of PSBs increased marginally during the year inspite of the substantial recoveries, whereas for foreign banks, recoveries exceeded accretions to NPAs. New private banks, however, had substantial addition to their NPAs, reflecting the impact of merger during the year (Chart II.9).

Table II.17: Bank Group-wise Movements in Non-performing Assets - 2001-02
							(Rs. crore)
Item			Scheduled	Public	Old Private	New Private	Foreign
			Commercial	Sector	Banks (22)	Banks (8)	Banks (40)
			Banks	Banks (27)
1			2	3	4	5	6
Gross NPAs
As on 31st March 2001			63,581.41	54,671.58	4,262.42	1,616.51	3,030.90
Addition during the year			24,824.32	15,668.25	1,718.72	6,312.52	1,124.83
Reduction during the year			17,502.10	13,833.24	1,131.43	1,107.47	1,429.96
As on 31st March 2002			70,903.63 #	56,506.59	4,849.71	6,821.56 #	2,725.77
Net NPAs
As on 31st March 2001			32,402.68	27,976.55	2,716.30	929.08	780.75
As on 31st March 2002			35,545.71	27,957.64	3,005.00	3,663.03	920.04
Memo:
Gross Advances			6,80,958.41	5,09,368.39	44,057.25	76,901.44	50,631.33
Net Advances			6,45,858.78	4,80,680.56	42,285.70	74,187.10	48,705.42
Ratio:
Gross NPAs/Gross Advances			10.41	11.09	11.01	8.87	5.38
Net NPAs/Net Advances			5.50	5.82	7.11	4.94	1.89
# The gross NPAs for end-March 2002 include an amount of Rs. 4,512 crore on account of merger.
Notes:	1.	Data is based on audited balance sheet figures of 97 scheduled commercial banks.
	2.	Figures in brackets indicates the number of banks in each group.
Source:		Respective bank balance sheet.

Public Sector Banks

2.68 The gross NPAs of PSBs as at end-March 2002 at Rs.56,507 crore witnessed an increase of 3.4 per cent over the year. The share of PSBs in total NPAs of SCBs declined from 85.8 per cent as at end-March 2001 to 79.7 per cent as at end-March 2002. The ratio of gross NPAs to gross advances of PSBs witnessed a sharp decline from 12.4 per cent as at end-March 2001 to 11.1 per cent as at end-March 2002. In line with the improvement in assets in the ‘standard’ category from 87.6 per cent at end-March 2001 to 88.9 per cent at end-March 2002, there has been a decline in the gross NPAs to gross advances ratio (Table II.18). As at end-March 2002, 24 out of 27 PSBs had net NPA to net advances ratio upto 10 per cent, whereas 3 banks had the ratio in excess of 10 per cent (Table II.19).

Table II.18: Classification of Loan Assets of Scheduled Commercial Banks - Bank Group- Wise
(As at end-March)
									(Amount in Rs.crore)
	Standard		Sub-standard		Doubtful		Loss Assets		Total NPAs		Total
Bank Group/Year	Assets		Assets		Assets						Advances
	Amount	per cent	Amount	per cent	Amount	per cent	Amount	per cent	Amount	per cent	Amount
1	2	3	4	5	6	7	8	9	10	11	12
Scheduled Commercial Banks
1999	3,40,714	85.3	19,928	5.0	31,350	7.8	7,444	1.9	58,722	14.7	3,99,436
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	6,09,916	89.6	21,382	3.1	41,207	6.1	8,378	1.2	70,967#	10.4	6,80,883
Public Sector Banks
1999	2,73,618	84.1	16,033	4.9	29,252	9.0	6,425	2.0	51,710	15.9	3,25,328
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
Old Private Sector Banks
1999	25,195	86.9	1,920	6.6	1,463	5.0	401	1.4	3,784	13.1	28,979
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	39,206	89.0	1,834	4.2	2,668	6.1	349	0.8	4,851	11.0	44,057
New Private Sector Banks
1999	13,199	93.8	737	5.2	128	0.9	6	0.0	871	6.2	14,070
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	91.1	2,904	3.8	3,871	5.0	41	0.1	6,816#	8.9	76,826
Foreign Banks in India
1999	28,702	92.4	1,238	4.0	507	1.6	612	2.0	2,357	7.6	31,059
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	1,010	2.0	927	1.8	2,793	5.5	50,631
# The gross NPAs for end-March 2002 include an amount of Rs. 4,512 crore on account of merger. Notes: 1. The figures furnished in this table may not tally with the data given in Table II.16 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.

Table II.19: Distribution of Scheduled Commercial Banks by Ratio of Net NPAs to Net Advances
								(No. of banks)
Net NPAs/Net Advances		End-March
		1998		1999		2000		2001		2002
1		2		3		4		5		6
Public Sector Banks		27		27		27		27		27
1. Upto 10 per cent		17		18		22		22		24
2. Above 10 and up to 20 per cent		9		8		5		5		3
3. Above 20 per cent		1		1		—		—		—
Old Private Sector Banks		25		25		24		23		22
1. Upto 10 per cent		21		17		18		16		17
2. Above 10 and upto 20 per cent		4		5		5		4		3
3. Above 20 per cent		—		3		1		3		2
New Private Sector Banks		9		9		8		8		8
1. Upto 10 per cent		9		9		8		8		8
2. Above 10 and upto 20 per cent		—		—		—		—		—
3. Above 20 per cent		—		—		—		—		—
Foreign Banks in India @		42		41		42		42		40
1. Upto 10 per cent		34		27		31		31		26
2. Above 10 and upto 20 per cent		6		11		7		6		5
3. Above 20 per cent		2		3		4		5		9
Note: @ No. of banks having nil NPAs for 1998, 1999, 2000, 2001 and 2002 were 14, 9, 8, 6 and 8 respectively.

New Private Sector Banks

2.69 The gross NPAs of new private banks witnessed a substantial increase from Rs.1,617 crore at end-March 2001 to Rs.6,822 crore at end-March 2002. Accordingly, the ratio of gross NPA to gross advances increased from 5.1 percent at end-March 2001 to 8.9 per cent at end-March 2002. The proportion of assets in the ‘standard’ category declined from 94.9 per cent at end-March 2001 to 91.1 per cent as at end-March 2002 (Table II.18).

Old Private Sector Banks

2.70 The gross NPAs of old private sector banks increased from Rs.4,346 crore as at end-March 2001 to Rs.4,850 crore as at end-March 2002. As percentage to gross advances, over this period, gross NPAs rose from 10.9 per cent to 11.0 per cent. Net NPAs, on the other hand, increased to Rs.3,005 crore, with net NPA to net advances ratio at end-March 2002 being 7.1 per cent. As at end-March 2002, out of 22 old private sector banks, 17 banks had net NPA to net advances ratio upto 10 per cent, whereas five banks had this ratio in excess of 10 per cent.

Foreign Banks

2.71 The gross NPAs of foreign banks declined by 12.0 per cent from Rs.3,106 crore at end-March 2001 to Rs.2,726 crore at end-March 2002. This had the effect of reducing the gross NPA to gross advances ratio over the same period from 6.8 per cent to 5.4 per cent. In terms of ratio to total assets, gross NPA decreased from 3.0 per cent to 2.4 per cent. Net NPAs, on the other hand, increased to Rs.920 crore. As per cent to net advances, net NPAs increased marginally from 1.8 per cent to 1.9 per cent, whereas as ratio to total assets, net NPA has remained at 0.8 per cent during the last two years. There has been a marked improvement in the asset profile of foreign banks, with the category of 'standard' asset registering an increase from 93.1 per cent as at end-March 2001 to 94.5 per cent as at end-March 2002. Out of 40 foreign banks operating in India, 26 banks had net NPAs to net advances ratio within 10 per cent and for as many as 9 banks, this ratio was in excess of 20 per cent. The bank-wise NPAs as percentage to advances/assets are provided in Appendix Tables II.9 (E) and (F).

Incremental Non-performing Assets

2.72 The incremental gross NPAs, as percentage of incremental gross advances for SCBs increased from 4.0 per cent in 2000-01 to 5.9 per cent in 2001-02. In absolute terms, the quantum of incremental gross NPAs was Rs.7,164 crore in 2001-02 as compared with Rs.3,332 crore in 2000-01. Among bank groups, there was a decline in incremental gross NPAs for the State Bank group and foreign banks. New private sector banks, incremental gross NPAs recorded a large increase from Rs.671 crore in 2000-01 to Rs.5,205 crore in 2001-02 reflecting the addition on account of the merger. Incremental net NPAs of SCBs, over the same period, increased from Rs.2,389 crore to Rs.3,084 crore which was also largely due to substantial increase in incremental net NPAs of new private banks (Table II.20). As per cent of incremental net advances, incremental net NPAs of SCBs declined from 2.9 per cent in 2000-01 to 2.6 per cent in 2001-02. As per cent to incremental assets, while the incremental gross NPAs of SCBs increased from 1.8 per cent to 3.0 per cent in 2001-02, the incremental net NPA to total assets remained constant at 1.3 per cent in both the years (Table II.21).

Table II.20: Bank Group-wise Incremental Gross and Net NPAs
				(Rs. crore)
Bank Group	Incremental Gross NPAs		Incremental Net NPAs
	2000-01	2001-02	2000-01	2001-02
1	2	3	4	5
Scheduled Commercial Banks	3,333	7,164	2,389	3,084
Public Sector Banks	1,639	1,835	1,790	-19
Nationalised Banks	819	2,684	1,087	468
State Bank Group	820	-849	702	-487
Old Private Sector Banks	531	504	378	234
New Private Sector Banks	671	5,205	291	2,734
Foreign Banks	492	-380	-70	135
Note: This Table is derived from Table II.16
Source: Balance sheets of respective banks.

Table II.21: Bank Group-wise Incremental Ratio of Gross and Net NPAs
										(Per cent)
Bank Group			Incremental Ratio of Gross NPAs to				Incremental Ratio of Net NPAs to
			Gross Advances		Total Assets		Net Advances		Total Assets
			2000-01	2001-02	2000-01	2001-02	2000-01	2001-02	2000-01	2001-02
1			2	3	4	5	6	7	8	9
Scheduled Commercial Banks			4.0	5.9	1.8	3.0	2.9	2.6	1.3	1.3
Public Sector Banks			2.6	2.7	1.2	1.5	2.9	0.0	1.3	0.0
Nationalised Banks			2.0	5.0	1.1	3.4	2.7	0.9	1.5	0.6
State Bank Group			3.8	-6.2	1.2	-1.8	3.2	-3.5	1.1	-1.0
Old Private Sector Banks			12.3	11.7	4.7	5.8	9.2	5.4	3.3	2.7
New Private Sector Banks			7.7	11.5	3.4	5.4	3.7	6.2	1.5	2.9
Foreign Banks in India			6.2	-7.3	2.5	-3.8	-0.9	2.4	-0.4	1.4
Note: This table is derived from Table II.16
Source:	1.	Balance sheets of respective banks.
	2.	Returns received from respective banks.

5. Capital Adequacy

2.73 As at end-March 2002, 25 out of the 27 PSBs had capital to risk-weighted assets ratio (CRAR) above the prescribed minimum levels. Out of this, as many as 23 banks had capital adequacy levels in excess of 10 per cent. Only two nationalised banks could not satisfy the capital adequacy standard (Table II.22). For PSBs as a whole, the CRAR at end-March 2002 stood at 11.8 per cent, which was substantially higher than 11.2 per cent as at end-March 2001. Bank-wise details of CRAR of various bank groups are given in Appendix Table II.11(A) to (C).

Table II.22: Distribution of Scheduled Commercial Banks by CRAR
							(No. of banks)
Bank Group	Capital to Risk-weighted Assets Ratio (CRAR)
	2000-01				2001-02
	Below	Between	Between	Above	Below	Between	Between	Above
	4 per	4-9 per	9-10 per	10 per	4 per	4-9 per	9-10 per	10 per
	cent	cent	cent	cent	cent	cent	cent	cent
1	2	3	4	5	6	7	8	9
State Bank Group	—	—	—	8	—	—	—	8
Nationalised Banks	1*	1	2	15	1	1	2	15
Old Private Sector Banks	2*	1	4	16	1*	—	2	19
New Private Sector Banks	—	—	1	7	—	1	1	6
Foreign Banks	—	—	4	38	1*	—	2	37
Total	3	2	11	84	3	2	7	85
* Negative

2.74 During 2000-01, of the 23 old private banks, two banks had negative CRAR, while one could not achieve the stipulated CRAR. As compared to that position, during 2001-02, out of the 22 old private banks, only one bank had a negative CRAR, while all others satisfied the prescribed CRAR. Among 8 new private sector banks, 7 banks had achieved the stipulated CRAR during 2001-02.

2.75 Out of the 40 foreign banks operating in India at end-March 2002, only one bank had negative CRAR, while the CRAR of the remaining banks were in excess of the stipulated minimum level.

Equity Capital and Sub-ordinated Debt

2.76 During the year ended March 2002, Punjab National Bank (PNB) made an initial public offering (IPO) and raised the full amount of Rs.390 crore. Consequent upon this IPO issue, the shareholding of the Central Government in PNB stands reduced to 80.0 per cent. Over the period 1993-2002, 12 PSBs have raised capital through public issues to the tune of Rs.6,501 crore (Table II.23). During 2002-03, Union Bank of India made an IPO in August 2002 aggregating Rs.288 crore. Consequent upon this IPO issue, the shareholding of the Central Government in Union Bank of India stands reduced to 60.9 per cent. Another nationalised bank, viz., Allahabad Bank made an IPO in October 2002 aggregating Rs.100 crore. After the issue, the shareholding of the Central Government would come down to 71.2 per cent.

Table II.23: Details of Public Equities by Public Sector Banks:1993-2002 (end-March)
						(Amount in Rs.crore)
Name of the bank/	Equity Capital	Size of the Public Issue			Equity	Post-Issue Shareholding
Date of Issue	before public				after public
	Issue	Equity	Premium	Total	issue	GoI/RBI	Others
1	2	3	4	5	6	7	8
State Bank of India	200.00	274.00	1,938.17	2,212.17	474.00	314.34 (66.3)	159.67 (43.7)
December, 1993			(Rs.90 per share)
State Bank of India (GDR)	474.00	52.28	1,218.12	1,270.40	526.28	314.34 (59.7)	211.94 (40.3)
October, 1996			(Rs.233 per share)
State Bank of Bikaner &	36.40	13.60	59.84	73.44	50.00	37.50 (75.0)	12.50 (25.0)
Jaipur - November, 1997			(Rs.440 per share)
Oriental Bank of Commerce	128.00	60.00	300.00	360.00	192.54	128.00 (66.5)	64.54 (33.5)
October, 1994			(Rs.50 per share)
Dena Bank	146.82	60.00	120.01	180.01	206.82	146.82 (71.0)	60.00 (29.0)
December, 1996			(Rs.20 per share)
Bank of Baroda	196.00	100.00	750.00	850.00	296.00	196.00 (66.2)	100.00 (33.8)
December, 1996			(Rs.75 per share)
Bank of India	489.00	150.00	525.00	675.00	639.00	489.00 (77.0)	150.00 (23.0)
February, 1997			(Rs.35 per share)			(69.3)*	(30.7)*
Corporation Bank	82.00	38.00	266.00	304.00	120.00	82.00 (68.3)	38.00 (31.7)
October, 1997			(Rs.70 per share)			(57.2)**	(42.8)**
State Bank of Travancore	35.00	15.00	75.00	90.00	50.00	37.50 (75.0)	12.50 (25.0)
January, 1998			(Rs.500 per share)
Syndicate Bank			At par
October, 1999	346.97	125.00	(Rs. 10 per share)	125.00	471.97	346.97 (73.5)	125.00 (26.5)
Vijaya Bank			At par
December, 2000	259.24	100.00	(Rs. 10 per share)	100.00	359.24	259.24 (72.2)	100.00 (27.8)
						(70.0)*	(30.0)*
Andhra Bank			At par
February, 2001	347.95	150.00	(Rs. 10 per share)	150.00	450.00	299.98 (66.6)	150.03 (33.4)
Indian Overseas Bank			At par
February, 2001	333.60	111.20	(Rs.10 per share)	111.20	444.80	333.60 (75.0)	111.20 (25.0)
* indicates shareholding post return of capital to Government. GoI - Government of India ** Subsequent upon allotment of equity shares on preferential basis to ‘Others’. Note : Figures in brackets in Columns 7 and 8 indicate percentage shareholding.

2.77 During the year 2001-02, eleven PSBs raised subordinated debts to augment their capital. They are: Punjab National Bank (Rs.480 crore), Union Bank of India (Rs.270 crore), Canara Bank (Rs.450 crore), Oriental Bank of Commerce (Rs.200 crore), Andhra Bank (Rs.75 crore), Central Bank of India (Rs.240 crore), Allahabad Bank (Rs.95 crore), Indian Overseas Bank (Rs.150 crore), UCO Bank (Rs.150 crore), Punjab & Sind Bank (Rs.45 crore) and State Bank of Travancore (Rs.120 crore). Subsequently, PNB raised Rs.390 crore in July 2002, while Andhra Bank and Central Bank of India raised Rs.140 crore and Rs.200 crore, respectively in September 2002.

2.78 During the year 2001-02, six private sector banks raised equity capital to the tune of Rs.849 crore, while five banks raised subordinated debt to the extent of Rs.225 crore.

Return of Capital

2.79 During the financial year 2001-02, two PSBs viz., Bank of India (Rs.150.4 crore) and Vijaya Bank (Rs.25.7 crore) returned capital to the Government of India. With this, the total amount of capital returned to the Government by the PSBs aggregated Rs.867 crore.

Writing off losses against paid-up capital

2.80 With the approval of the Central Government, Central Bank of India wrote off losses from its paid-up capital amounting to Rs.681 crore as on March 31, 2002.

6. Indian Banks' Branches Abroad

2.81 At present, 9 Indian banks (8 in public sector and 1 in private sector) are operating branches abroad. As at the end of September 2002, the number of Indian banks’ branches operating abroad stood at 93, while the number of representative offices of Indian banks abroad were 17. The number of wholly-owned subsidiaries of Indian banks abroad and joint ventures abroad were 15 and 5, respectively.

7. Foreign Banks in India

2.82 The requests of new foreign banks for conducting business in India are considered keeping in view the financial soundness of the bank, international and home country ranking, rating, international presence, and economic and political relations between the two countries. In particular, the home country of the bank should not discriminate against Indian banks. The bank should be under consolidated supervision of the home country regulator.

2.83 It has been stipulated that the minimum capital requirement for foreign bank should be US$ 25 million, spread over 3 branches i.e. US$ 10 million for the first branch, additional US$ 10 million for the second branch and further US$ 5 million for the third branch. Additional branches are permitted after monitoring performance of existing branches of the banks, their financial results, inspection findings, etc. The number of licences is fixed in conformity with India's commitment made to World Trade Organisation, which is presently 12 licences (both for new and expansion by existing banks) per year, excluding off-site ATMs, which also require licences.

2.84 As on September 30, 2002, there are 40 foreign banks operating in India with 203 branches. While 4 banks have 10 or more branches, 18 banks were operating with only one branch each. The branches of foreign banks are spread over 25 centres in 15 States/Union territories. Foreign banks have also set up representative offices in India. As on June 30, 2002, 23 banks from 12 countries have representative offices in India, of which 19 are in Mumbai, three in New Delhi and one in Chennai. Thus, 63 banks have presence in India either through branches or representative offices.

2.85 Four banks viz., Dresdner Bank, Commerzbank, KBC Bank and Siam Commercial Bank have decided to wind up their operations in India. The winding up process is in progress.

8. Regional Rural Banks

Mobilisation and Deployment of Funds

2.86 The outstanding deposits mobilised by Regional Rural Banks (RRBs) registered an increase of 16.7 per cent to Rs.43,220 crore in 2001-02 as compared with a rise of 23.2 per cent registered in the previous year. Both demand and time deposits registered growth rates of over 16.0 per cent, which were lower than those registered in the previous year (Table II.24). Similarly, the credit extended by RRBs increased at a lower rate of 17.9 per cent during 2001-02 as compared with 23.0 per cent in 2000-01. During the period, the credit-deposit ratio of RRBs rose to 42.5 per cent as compared with 42.1 per cent in the previous year. Owing to the decline in investments, especially those in approved securities, the investment-deposit ratio, however, witnessed a decline to 15.7 per cent in 2001-02.

Table II.24: Important Banking Indicators of RRBs
								(Amount in Rs.crore)
Item					March 24,	March, 30	March 29,	Variations
					2000	2001	2002	2000-01	2001-02
	1				2	3	4	5	6
								(3-2)	(4-3)
1.	Liabilities to the Banking System				183	177	188	-6	11
								(-3.3)	(6.2)
2.	Liabilities to Others				31,306	38,696	44,873	7,390	6,177
								(23.6)	(16.0)
	2.1	Aggregate Deposits (a+b)			30,051	37,027	43,220	6,976	6,193
								(23.2)	(16.7)
		(a)	Demand Deposits		5,105	6,499	7,716	1,394	1,217
								(27.3)	(18.7)
		(b)	Time Deposits		24,946	30,528	35,504	5,582	4,976
								(22.4)	(16.3)
	2.2	Borrowings			52	24	12	-28	-12
								(-53.8)	(-50.0)
	2.3	Other Demand & Time Liabilities*			1,203	1,645	1,641	442	-4
								(36.7)	(-0.2)
3.	Assets with the Banking System				13,454	16,973	18,509	3,519	1,536
								(26.2)	(9.0)
4.	Bank Credit				12,663	15,579	18,373	2,916	2,794
								(23.0)	(17.9)
5.	Investments (a+b)				6,009	7,546	6,772	1,537	-774
								(25.6)	(-10.3)
		(a)	Government Securities		1,223	1,588	1,915	365	327
								(29.8)	(20.6)
		(b)	Other Approved Securities		4,786	5,958	4,857	1,172	-1,101
								(24.5)	(-18.5)
6.	Cash Balances				343	441	472	98	31
								(28.6)	(7.0)
Memorandum Items :
A)	Cash Balance-Deposit Ratio				1.14	1.19	1.09
B)	Credit-Deposit Ratio				42.14	42.07	42.51
C)	Investment/Deposit Ratio				20.00	20.38	15.67
D)	Investment+Credit/Deposit Ratio				62.13	62.45	58.18
* includes Participation Certificates issued to others.
Note: Figures in brackets are percentage variations.

Purpose-wise outstanding Loans and Advances

2.87 The loans and advances outstanding in respect of RRBs for agriculture accounted for 45.7 per cent of total advances as on March 31, 2001. The term loans for agriculture and allied activities at Rs.3,547 crore formed 49.0 per cent of agricultural advances, while crop loans constituted the remaining amount. Non-agricultural advances, accounted for 54.3 per cent of total loans and advances as on March 31, 2001 (Table II.25).

Table II.25: Purpose-wise Outstanding Loans and Advances of RRBs
					(Rs.crore)
Purpose			As at end-March
			2000		2001*
1			2		3
1.	Short term (crop loans)		2,865		3,670
2.	Term loan for agriculture		3,339		3,547
	and allied activities
3.	Indirect Advances		23		N.A.
I	Total Agriculture		6,227		7,217
	(1 to 3)		(47.5)		(45.7)
4.	Rural artisans, village		773		561
	and cottage industries
5.	Other Industries		664		246
6.	Retail trade and
	Self-employed, etc.		2,073		1,951
7.	Other purposes		3,372		5,819
II	Total Non-Agriculture		6,882		8,577
	(4 to 7)		(52.5)		(54.3)
Total (I+II)			13,109		15,794
			(100.0)		(100.0)
* Purpose-wise break-up in respect of 195 RRBs.
N.A. Not available.
Note : Figures in brackets are percentages to the total.
Source : NABARD

Financial Performance of RRBs

2.88 The data in respect of 196 RRBs for 2000-01 and 2001-02 indicate that there was a significant improvement in their performance, although the number of profit-making RRBs declined over the year. The policy measures undertaken in respect of RRBs, viz., the permission to relocate loss-making branches to better business location/centres, conversion of loss-making RRBs into satellite/mobile offices without impairing the performance of service area had salutary effect on the financial performance of RRBs. As against 170 RRBs making operating profits of Rs.790 crore in 2000-01, 167 RRBs earned operating profits of Rs.838 crore in 2001-02. Notwithstanding the higher provisions and contingencies made during the year, the net profit of the 196 profit-making RRBs stood at Rs.608 crore in 2001-02. Given the significant asset growth, the ratio of net profit to total assets declined from 1.2 per cent in 2000-01 to 1.1 per cent in 2001-02. Although modest in absolute terms, 'other income' of RRBs witnessed a significant rise of 59.4 per cent during the year (Table II.26) (Chart II.10).

Table II.26: Financial Performance of Regional Rural Banks
									(Amount in Rs. crore)
	Item			2000-01			2001-02			Variation
				Loss	Profit		Loss	Profit		Col. (7)
				Making	Making	RRBs	Making	Making	RRBs	over
				[26]	[170]	[196]	[29]	[167]	[196]	Col. (4)
1				2	3	4	5	6	7	8
A.	Income			390.39	4,469.44	4,859.83	484.40	5,079.79	5,564.19	704.36
	(i+ii)									(14.49)
		i)	Interest income	367.38	4,258.56	4,625.94	448.63	4,742.83	5,191.46	565.52
										(12.22)
		ii)	Other income	23.01	210.88	233.89	35.77	336.96	372.73	138.84
										(59.36)
B.	Expenditure			466.23	3,792.96	4,259.19	576.45	4,379.86	4,956.31	697.12
	(i+ii+iii)									(16.37)
		i)	Interest expended	307.67	2,657.86	2,965.53	361.44	2,967.71	3,329.15	363.62
										(12.26)
		ii)	Provisions and contingencies	15.94	113.62	129.56	28.46	137.74	166.20	36.64
										(28.28)
		iii)	Operating expenses	142.62	1,021.48	1,164.10	186.55	1,274.41	1,460.96	296.86
			of which :							(25.5)
			Wage Bill	127.68	876.82	1,004.50	157.63	1,106.61	1,264.24	259.74
										(25.86)
C.	Profit
		i)	Operating Profit/Loss	-59.90	790.10	730.20	-63.59	837.67	774.08	43.88
										(6.01)
		ii)	Net Profit/Loss	-75.84	676.48	600.64	-92.05	699.93	607.88	7.24
										(1.21)
D.	Total Assets			5,235.70	44,405.69	49,641.39	6,169.30	50,634.54	56,803.84	7,162.45
										(14.43)
E.	Financial Ratios @
		i)	Operating Profit	-1.14	1.78	1.47	-1.03	1.65	1.36
		ii)	Net Profit	-1.45	1.52	1.21	-1.49	1.38	1.07
		iii)	Income	7.46	10.07	9.79	7.85	10.03	9.80
		iv)	Interest income	7.02	9.59	9.32	7.27	9.37	9.14
		v)	Other Income	0.44	0.47	0.47	0.58	0.67	0.66
		vi)	Expenditure	8.90	8.54	8.58	9.34	8.65	8.73
		vii)	Interest expended	5.88	5.99	5.97	5.86	5.86	5.86
		viii)	Operating expenses	2.72	2.30	2.35	3.02	2.52	2.57
		ix)	Wage Bill	2.44	1.97	2.02	2.56	2.19	2.23
		x)	Provisions and Contingencies	0.30	0.26	0.26	0.46	0.27	0.29
		xi)	Spread (Net Interest Income)	1.14	3.60	3.34	1.41	3.51	3.28
@ Ratios to Total Assets.
Source : NABARD.