The Regional Rural Banks witnessed a growth of 15 percent in net profit during 2016-17 in spite of an increase in provisioning due to higher NPA’s
According to the RBI’s report on ‘Trend and Progress of Banking in India’ for 2016-17, as many as 56 RRBs operating in the country recorded a net profit of Rs. 2,300 crore during 2016-17 as against Rs. 2,000 crore in 2015-16.
The report attributed the growth to the increase in both interest and other income coupled with decline in operating expenses.
The net interest income stood at Rs. 16,000 crore (Rs. 11,600 crore), and other income at Rs. 3,600 crore (Rs. 2,100 crore) during the period.
The provisions and contingencies increased from Rs. 2,100 crore to Rs. 4,200 crore during the period. The gross NPAs (non-performing assets) of these banks stood at 8.1 per cent (6.8 per cent) during the period.
The loans and advances of the RRBs in the country increased to Rs. 2.23 lakh crore during 2016-17 as against Rs. 1.95 lakh crore in the previous fiscal.
The outstanding advances in priority sector stood at Rs. 1.93 lakh crore (Rs. 1.77 lakh crore). Of this, the share of agriculture advances stood at Rs. 1.44 lakh crore (Rs. 1.31 lakh crore).
The report noted that current and saving deposits increased by 20 per cent or more, partly reflecting the impact of demonetisation.
The current deposits stood at Rs. 10,700 crore (Rs. 8,900 crore), and savings deposits at Rs. 1.88 lakh crore (Rs. 1.48 lakh crore) during the year.
The number of RRBs operating in the country has come down to 56 as at end-March 2017 from 196 in 2005 through amalgamation and consolidation of existing RRBs to improve their financial performance and soundness.
The report said that many RRBs have been recapitalised by the Centre intermittently to meet the minimum 9 per cent CRAR in a sustainable manner and also to enable them to extend more credit to the productive sectors.