The recovery of loans by the banks operating in Orissa has been far from satisfactory. By the end of 2008-09, the average recovery rate of all the banks- PSU banks, private sector banks, cooperative banks and Regional Rural Banks (RRBs) has been only 50.3 per cent.
The lackluster recovery of loans is an impediment to expansion of banking as it increases Non-Performing Assets (NPAs) thereby adversely affects the resource position and profitability. The loan recovery figures are as per the data compiled by the State Level Bankers' Committee (SLBC).By the end of 2008-09, 24998 cases were filed with the competent authority for recovery of dues worth Rs 65.38 crore. This includes 20856 cases amounting to Rs 46.4 crore pending for over three years. In addition to this, 6312 cases have been filed for the recovery of Rs 5.05 crore under the provision of Orissa Agriculture Credit Operation and Miscellaneous Provision (Banks) Act.
The Orissa State Financial Corporation (OSFC) has the poorest loan recovery rate at a meagre 0.8 per cent. OSFC's total demand for recovery by the end of 2008-09 stood at Rs 1955.22 crore out of which the corporation had collected merely Rs 14.89 crore, meaning an overdue amount of Rs 1940.33 crore. The Small Industries Development Bank of India (SIDBI) had the highest recovery rate of 84.7 per cent by the end of 2008-09. However, SIDBI’s total demand for recovery by the end of 2008-09 stood at only Rs 17.23 crore out of which the bank had recovered Rs 14.59 crore.