Banking operations in Seemandhra hit

G. Naga Sridhar Updated - March 12, 2018 at 03:59 PM.

Cash flow into salary accounts dries up, bankers worry over bad loans

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The ongoing agitation in the Seemandhra region against the proposed Telangana State is taking a heavy toll on banking transactions.

The region has about 60 per cent of bank branches in the State though the exact number varies from bank to bank. On an average, banks have lost 13-18 working days (excluding holidays) in the last 70 days, say bankers.

“ Working hours have shrunk even when a branch is open, depending on the locality. In zonal offices, our staff are working at odd hours such as 4 p.m. to 9 p.m.,’’ M. Bhagavantha Rao, Managing Director, State Bank of Hyderabad, told

Business Line .

According to C.R. Sasi Kumar, Chief General Manager, State Bank of India, deposit mobilisation and disbursal of loans have been affected. “As salaries are not being given out to the striking government employees, there are withdrawals from other savings and term deposits,’’ he said. He is, however, happy that the agitators were not violent when it comes to dealing with banks and ATMs. “By and large, there is no violence and ATMs are generally spared,’’ he said adding that efforts are on to regularly replenish ATMs with cash. A senior official of Andhra Bank, which has the largest presence outside Telangana, said salary accounts usually had a fund flow of Rs 35 crore a month, but that has now been hit.

“We have also started a new facility under ‘Super Salary Account’ in which net salary of customers with salary accounts with us is given as loan to be deducted after the agitation,’’ he said. Another concern is non-performing assets (NPAs). “We are worried about possible increase in retail NPAs as there have been no salaries disbursement for the last two months,’’ the SBH executive said. If non-payments crosses 90 days, it has to be treated as NPA according to the RBI norms.

If the situation worsens, NPA problems might spread to other sectors such as small and medium enterprises. Irregular working hours, shortage of cash in ATMs, delay in remittances are some of the problems faced by customers. “My parents are having great difficulty in sending money to me for last two months due to the agitation,’’ M. Siva Kumar, a M.Tech student in the University of Hyderabad, said.

> naga.gunturi@thehindu.co.in

Published on October 9, 2013 17:14