Sharp decline in Shimla Urban Cooperative Bank's NPA: Administrator

Shimla, Nov 2 (UNI) Assuring the depositors that their money was safe with the Shimla Urban Co-operative Bank (SUCB), its administrator Laxmi Kant Sharma today said the banks non-performing assets (NPA) had come down to 3.63 per cent from 10.74 per cent last year.

The financial position of the bank could be gauged from the fact that it had regained its Grade I position after it registered a sharp decline in its NPA, he told reporters here.

Mr Sharma said the recovery of the past loans had been remarkable even in cases where loans had been given with small or inadequate security and even the repayments were regular.

The bank has deposits of Rs 12 crore, while it had advanced loans amounting to seven crore rupees, out of which Rs 1.86 crore were declared as NPA, he said.

He said, in fact, all the loans against inadequate security were considered as ''unsafe loans'' by the RBI, but since majority loans were granted against the salary of the government employees, the recovery was almost 100 per cent.

Replying to a question, he said that the bank had issued notices to former board of directors who had sanctioned ''unsafe loans'', adding that their assets could also be auctioned to recover the loans advanced by them.

The administrator said the bank had acted swiftly against ''willful'' defaulters and a sum of Rs 1.69 crore were recovered from 649 out of 749 borrowers, to whom notices were issued.

The bank had earned a profit of Rs 10 lakh last year after making provision of Rs 56 lakh for NPA and unsecured loans as per the instructions of the RBI and a target of Rs 60 lakh profit had been fixed for this year, he said.

Mr Sharma said the bank was operating only in urban areas of Shimla and a proposal to open two more branches in the town had been sent to RBI for clearance.

The bank also planning to open an extension counter in Sanjauli or Boileauganj area of the town, he added.

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