Banks' NPA rises, while CAR dips: Assocham
New Delhi, Nov 7 (UNI) An industry chamber today said 24 per cent rise in non-performing assets (NPAs) and decline of two per cent in capital adequacy ratio (CAR) in the second quarter of current fiscal do not portray healthy picture of commercial banks in the country.
Basing an analysis on reporting by 15 public sector and 10 private banks, Assocham said aggregate net NPAs of 25 banks increased by 24.36 per cent to Rs 17,522.82 crore in second quarter of 2008-09 from Rs 15,462.84 crore in the same period of FY08, while their CAR declined to 12.68 per cent from 13.41 per cent.
''Although the Indian banking sector has remained insulated from the global financial crisis, the emerging trends as found in the study do not give positive signals,'' Assocham said.
The study said Karur Vysya Bank recorded maximum rise of 275.36 per cent in net NPAs in Q2-FY'09 with Rs 50.03 crore as against Rs 13.33 crore in Q2-07.
It was followed by HDFC bank with an increase by 139 per cent, Vijaya Bank (132 per cent), State Bank of Hyderabad (81.42 per cent) and IDBI (57 per cent). Only South Indian Bank registered an improvement in net NPAs by minus 29.82 per cent among private banks, the study said.
In contrast, seven major PSBs recorded a significant decrease in net NPAs, including Central Bank of India (-87.39 per cent), Oriental bank of Commerce (-82.18 per cent), Union Bank of India (-73.38 per cent), Dena Bank (-17.24 per cent), Bank of India (-14.80 crore), Bank of Maharashtra (-7.75 crore) and Indian Bank (-1.54 per cent).
Assocham study said CAR of 16 of the 25 banks fell in the quarter ended September'08 compared to the previous fiscal but they still managed to remain above the nine per cent limit prescribed by international banking norms. The 16 banks include 11 public sector banks (PSBs).
Axis bank registered the maximum decline in CAR from 17.59 per cent in Q2FY08 to 12.2 per cent in Q2FY09. It was followed by HDFC bank from 14.9 per cent to 11.4 per cent, Bank of Maharashtra from 13.6 per cent to 10.78 per cent and ICICI bank recorded a decline from 16.79 per cent to 14.01 per cent respectively.
Among PSBs, CAR of Central Bank of India decliined to 9.85 per cent from 12.38 per cent.
However, Federal Bank had the maximum rise in CAR to 20.81 per cent from 13.08 per cent, followed by South Indian Bank's to 14.44 per cent from 14.36 per cent.
CAR
of
Yes
Bank
rose
to
14.28
per
cent
over
13.02
per
cent
in
previous
year,
City
Union
Bank
from
12.85
per
cent
to
13.24
per
cent,
Karnataka
Bank
from
13.03
per
cent
to
13.21
per
cent
and
Dena
Bank
from
11.47
per
to
12.34
per
cent,
the
study
concluded.
UNI
SAA
SBA
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