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Gic, New India Bad Loans Dip, Others Struggle

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BUSINESS STANDARD

State-owned general insurance industry players continue to be plagued by non-performing assets (NPAs) even as the General Insurance Corporation of India (GIC) and The New India Assurance Company have been able to marginally pare the percentage of sticky assets in their portfolios.

GIC reported a net NPA of 11.3 per cent during 2000-01, down from 11.7 per cent in the preceding fiscal. In the case of New India, the percentage of net NPAs came down from 13.65 per cent to 11.83 per cent.

United India Insurance, which was also a subsidiary of GIC, reported a marginal rise in net NPA -- from 3.05 per cent as on March 31, 2000, to 3.17 per cent as of March 31, 2001.

 

However, in absolute terms, net NPAs have increased from Rs 126.73 crore to Rs 139.87 crore.

The recessionary trend and the declining commodity prices have led to high NPAs, GIC stated in its balance sheet. The designated National Reinsurer had till March 31, 2001, an exposure to the tune of Rs 2.336.96 crore to the private sector.

Of this, it had invested Rs 1,067 crore in equity shares of various companies and Rs 713 crore in debentures and bonds of corporates.

During 2000-01, GIC wrote off investments that had depreciated to the extent of Rs 29.27 crore. In the preceding fiscal, the write-off of depreciated investments was to the tune of Rs 10.45 crore.

GIC also provided for doubtful loans, investments and debts to the extent of Rs 121 crore last year against Rs 82.94 crore in 1999-2000.

Over the last few years, GIC's profitability has been slipping. From Rs 372.62 crore in 1998-99, it slipped to Rs 313.6 crore in 1999-2000 and further to Rs 242.29 crore in 2000-01.

New India wrote off investments to the tune of Rs 43.5 crore for the year ended March 31, 2001, against Rs 6.06 crore the previous year. It has provided Rs 25.27 crore (Rs 23.96 crore) for doubtful debts.

National Insurance Company wrote off investments to the extent of Rs 27.47 crore during 2000-01, against Rs 6.37 crore in 1999-2000. It has provided for Rs 19.5 crore towards provisioning for doubtful debts as of March 31, 2001, against Rs 5 crore.

United India Insurance blamed "the continued recession in major sectors such as steel and textiles" for its rising NPAs. It wrote off Rs 29.12 crore during fiscal 2000-01, four times the amount written off in the preceding fiscal at Rs 6.97 crore.

It has made a provisioning of Rs 28.98 crore towards bad and doubtful debts compared with Rs 13.63 crore in the preceding fiscal.

The Oriental Insurance Company wrote off amounts in respect of investments to the extent of Rs 32.91 crore against Rs 4.52 crore the preceding year.

Oriential Insurance has also provided for bad and doubtful debts to the tune of Rs 18.75 crore for 2000-01 against Rs 6.83 crore for 1999-2000.

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First Published: Jan 30 2002 | 12:00 AM IST

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