Pointing out that the net NPAs as proportion of net advances had fallen by 24.7% in 2003-04 against 8.1% in the previous year, the survey added that it was primarily on account of higher provisions of NPAs made by SCBs.
According to the survey, the advances to non-priority sector accounted for 51.24% of NPAs in PSBs, while for private banks it was 75.3%.
The survey noted that while the share of NPAs in the agriculture sector and SSIs of PSBs declined in 2003-04, the share of other priority sectors increased. However, it said the momentum of recovery would be resumed with the amendments to the Securitisation Act.
It also noted that all the bank groups had the stipulated 9% capital adequacy ratio. At the end of March 31, 2004, the capital to risk asset ratio (CRAR) of PSBs stood at 13.2% indicating an improvement of 0.6 percentage point from the previous year. There was also an improvement in the CRAR of old private sector banks to 13.7% in 2003-4 up from 12.8% in 2002-03. Among the bank groups, a substantial improvement was witnessed in new private sector banks from 10.2% in 2003-04 to 13.5% in the first half of the current fiscal.
The banking sector also witnessed a strong growth in deposits and advances in 2003-04. However, the survey highlights that the profitability of SCBs, though still high, showed a declining trend in the first half of the current fiscal, primarily due to a fall in treasury income. Pointing out that there was no cause for concern, the survey adds that the banks are financially strong, with the NPA level declining. Simultaneously, the capital adequacy, ratio has shown a sharp increase.
In 2003-04 the SCBs registered a 30% growth in net profit at Rs 22,271.
The total income of the SCBs increased by 6.6% to Rs 1,83,767 crore in 2003-04 as against 14% in the previous year.