Four public banks break free of bad loans

Four public sector banks had nil non-performing assets (NPAs) as on March 31,2004. Oriental Bank of Commerce and three associate banks of the State Bank of India, the State Bank of Indore, the State Bank of Patiala and the State Bank of Saurashtra, have brought down their NPAs to zero from Rs 688 crore on March 31, 2003.

The four banks together made a provision of Rs 2,181 crore for NPAs for the financial year ended in March 2004 (Rs 1,639 crore in the financial year ended March 2003 and Rs 1,270 crore in the year ended in March 2002).

Indeed, the net NPAs of state-owned banks have dropped significantly over the last two years.

Oriental Bank of Commerce, the first state-owned bank to became a nil NPA entity in September 2003, made a provision of Rs 1,211 crore in 2003-2004 to bring its NPAs to zero.

Likewise, State Bank of Indore made a provision of Rs 266 crore, State Bank of Patiala of Rs 503 crore and State Bank of Saurashtra of Rs 200 crore to became zero NPA banks.

Overall, the net NPAs of 26 public sector banks declined by Rs 6,262 crore in 2003-2004, from Rs 23,826 crore in 2002-2003 to Rs 17,564 crore in 2003-2004.

At the same time, the gross NPAs of these banks fell by only Rs 2,506 crore, from Rs 52,840 crore in 2002-2003 to Rs 50,334 crore in 2003-2004.

The net NPAs of India's biggest bank, the State Bank of India, declined by Rs 741 crore, from Rs 6,183 crore in 2002-2003 to Rs 5,442 crore in 2003-2004 while its gross NPAs fell from Rs 13,506 crore to Rs 12,667 crore in the period.

In 2003-2004, the net NPA of Punjab National Bank (PNB) tumbled by Rs 1,078 crore, from Rs 1,527 crore to Rs 449 crore.

Other public sector banks whose net NPAs declined significantly include Allahabad Bank (Rs 524 crore), Union Bank of India (Rs 408 crore), Indian Bank (Rs 372 crore) and Indian Overseas Bank (Rs 335 crore).