Money & Banking

Urban co-op banks’ performance improves

Our Bureau Mangaluru | Updated on January 09, 2018

Net profit rose to ₹3,900 crore from ₹3,700 crore in FY16 partly due to the diversification strategies facilitated by improving capital positions

The net profit of urban cooperative banks (UCBs) increased to ₹3,900 crore in 2016-17, compared with ₹3,700 crore in 2015-16.

According to the RBI, UCBs exhibited better performance in terms of profitability, partly due to the diversification strategies facilitated by improving capital positions.

It said that the asset quality of UCBs witnessed some deterioration partly due to temporary problems in repayments faced by small borrowers following the immediate impact of demonetisation.

While the loans and advances of UCBs stood at ₹2.61 lakh crore (₹2.44 lakh crore), gross non-performing assets (NPAs) reached ₹18,600 crore (₹15,000 crore) during the period.

The report said that the balance sheet of UCBs expanded in 2016-17 on account of higher growth in net worth (capital plus reserves) and deposits on the liability side.

The capital of UCBs increased to ₹12,200 crore in 2016-17 from ₹11,000 crore in 2015-16.

While reserves went up to ₹33,500 crore (₹29,600 crore) during the period, deposits increased to ₹4.43 lakh crore (₹3.92 lakh crore).

India has 95,946 credit cooperatives. This includes 1,562 UCBs and 94,384 rural cooperatives.

Rural cooperatives

However, the performance of rural cooperatives was not so impressive in some sectors. The report said that the data on rural cooperatives are available with a lag of one year, the latest being end-March 2016.

Rural cooperative credit institutions in the country consist of two sets — short-term and long-term institutions — each with specific objectives.

Of the 33 state co-operatives, 28 recorded a profit of ₹700 crore at the end of March 2016, five recorded a loss of ₹100 crore. The loans and advances of these cooperatives stood at ₹1.22 lakh crore, and NPAs at ₹5,600 crore during the year.

Of the 370 district central co-operative banks in the country, 319 made total profit of ₹1,700 crore and 51 made losses of ₹600 crore during 2015-16.

The loans and advances of these DCCBs stood at ₹2.42 lakh crore during the year, and NPAs at ₹22,700 crore.

Of the 93,367 primary agricultural credit societies, 45,241 made profits of ₹4,100 crore and 36,695 made losses of ₹6,500 crore.

The loans and advances of PACS stood at ₹1.80 lakh crore during 2015-16, and the total overdue of NPAs were ₹29,900 crore.

Published on December 22, 2017

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