Finance Minister Nirmala Sitharaman told Rajya Sabha on Tuesday that gross bad loans from district central cooperative banks (DCCBs) are among the highest in the banking system, at 12.6% (35,298 crore). ) of your advances to March 2020.
The minister said that the gross delinquency (NPA) of urban cooperative banks (UCB), also, assets remained high at 11.3% (Rs 35,528 crore) at the end of March 2021. However, the gross NPA of state cooperatives Operating banks were in the order of 6.7% (Rs 13,477 crore) as of March 2020, Sitharaman said in a statement in the upper house.
By contrast, the scheduled commercial bank bad debt ratio stood at 7.5% in March 2021, down from 8.4% a year earlier, the RBI said in its latest report this month.
Cooperative bank finances came under increased scrutiny recently after the government separated the cooperation department from the agriculture ministry to make it a full-fledged ministry under Amit Shah. Prior to that, cooperative sector issues came into focus after the crisis at the Punjab Maharashtra Cooperative Bank (PMC) in 2019. This had led the government to amend the Banking Regulation Act to empower the RBI for more effective regulation of cooperative banks. The idea was to better protect the interests of depositors and avoid a crisis similar to PMC Bank in the future.
Citing the latest data, Sitharaman said there are 34 state cooperative banks, 351 DCCB and 1,534 UCB in the country.
Separately, RBI data shows that, as of March 2020, India had as many as 97,006 rural cooperative banks, including both state cooperative banks and DCCBs, and a large number of primary agricultural credit societies.
In a written response in the Rajya Sabha, the Minister of State for Finance, Bhagwat Karad, also said that up to 28 UCBs are placed under the comprehensive directorates of the RBI, according to which they are restricted from fulfilling their obligations without the approval of the central. Bank.
UCB’s assets stood at Rs 6.5 lakh crore in March 2021, while its loan portfolio was worth Rs 3.1 lakh crore, Sitharaman said, citing RBI data. Similarly, based on data obtained from Nabard, the assets of state cooperative banks and DCCBs amounted to Rs 3.4 lakh crore and Rs 5.4 lakh crore, respectively, in March 2020. Similarly, their loans amounted to Rs 2 lakh. crore and Rs 2.8 lakh crore, respectively.
Many of the cooperatives, thanks to their opaque structure and serious governance problems, have reportedly been used to funnel black money for a long time.