First-time classification of assets as sub-standard accounted for Rs 2000 crore, he told analysts at a closed-door meeting that followed the results' press conference.

The bank's net NPAs came down from 7.3 per cent to 6.07 per cent at end-March 1998. Bhattacharya explained that the reductions in NPAs were made possible by cash recoveries of Rs 1000 crore, Rs 750 crore from asset upgradation and write-offs and "compromise" settlements amounting to Rs 600 crore.

The bank's CFO pointed out that most of the non-performing assets were 4-5 years old.

"We expect substantial improvement in the next four to five year in terms of reduced level of NPA,," he said. Net advances made during the year were Rs 12,000 crore, he revealed. Of the total NPAs, nearly 25 per cent is due to priority sectoradvances, Bhattacharya clarified.