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Even as rising NPAs (non-performing assets) are a concern, Canara Bank expects its cash recoveries to cross Rs 3,000 crore this year.
Last fiscal, the bank made cash recoveries of about Rs 2,000 crore for the full year.
Though there is a stress on asset quality and NPAs are increasing, “we have handled them well and on an upfront basis, enabling us to recover much more than what we recovered the previous year,” Mr S. Raman, Chairman and Managing Director, Canara Bank, told Business Line .
The increase in NPAs was due to a subdued growth this year and a continuous increase in interest rates.
Besides, the system-based NPA generation added almost Rs 1,200 crore to the bank's NPAs, he said.
However, during the first three quarters of this fiscal, Canara Bank's cash recoveries were already more than Rs 2,800 crore, compared with Rs 2,000 crore last year, he pointed out.
‘Successful' in small accounts
The recoveries have been “successful” in small accounts, said Mr Raman. Canara Bank has conducted about 16,000 ‘Can Adalats' across the country for recoveries of small accounts, he added. Every branch conducted, on an average, five such adalats and the bank received 100-600 applications for each adalat , he pointed out.
“We have also appointed two General Managers to monitor existing assets so that they don't slip,” said Mr Raman. Though the delinquency ratio could be slightly more this year, accretion of NPAs in the future years “appears much more in control and we are in a much better shape to control our assets.”
With stress on assets, restructuring of corporate and SME loans is also on the rise this year, said Mr Raman.
The provisioning and reduced rate of interest for restructured loans would have an impact on the balance-sheet.
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