Odisha witnessed an alarming rise of over Rs 2,000 crore in the non performing asset (NPA) in a period of three months, as per a report released by the State-Level Bankers’ Committee (SLBC).
According to SLBC, the total NPA in the State as on March 31, 2021 was Rs 11,339.37 crore which has risen to Rs 13,645.17 crore as on June 30, 2021. The SLBC termed NPA rate as ‘at much higher side and alarming.’
While the NPA percentage has decreased in agriculture, education and housing loan, for PMEGP, NULM, NRLM and SHG, the NPA per cent was too high. It is said that the rise in NPA in PMEGP is due to lack of market linkage which hit the start-ups.
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The banks are facing problem to recycle the funds owing to non repayment of loans, mounting overdue and rising NPA stock, the SLBC pointed out. It suggested that banks and government departments have to make joint efforts with specific strategies to improve the recovery performance for better recycling of funds.
Arupananda Jena, convenor of SLBC said, “The main reason behind rise in NPAs in MSME sector is closure of many industries due to Covid-19. However, both the State and Centre have taken several measures to bail out these pandemic-hit industries.”
Chartered Accountant Trinath Lekna said, “The income of people has adversely affected during this Covid times and their repayment capacity also hampered. The government and bankers should jointly form committees and mentor MSMEs who have taken loans to tackle the situation.”
In 2018, Shakti Prasad Samanta, a young entrepreneur of Khallikote of Ganjam district had taken loan and set up Sadhyarani Diary and Agrovet Private Ltd at Keshpur along National Highway 16. However, lockdown and shutdown have pushed Samanta into acute financial crisis and the plant is now on the verge of closure.
“Our account became NPA since May. Though we tried to convince the bank that our milk business is a viable business where there is scope for daily cash transaction, but the bank refused to show interest,” Samanta said.
In order to improve the situation in the MSME sector, the State government announced loan waiver of 2 per cent for male beneficiaries and 5 per cent for female beneficiaries.