CHENNAI: An analysis of Provision Coverage Ratio (PCR) of all public sector banks for NPAs as at end of March 2011 reveals that Indian Bank is number one among 21 public sector banks under Provision Coverage for NPAs.
The RBI has prescribed a minimum of 70 per cent (PCR). Sixteen of these public sector banks have been able to maintain Provision Coverage Ratio above the RBI norm.
Six banks namely Union Bank of India, Vijaya Bank, State Bank of India, UCO Bank, Central Bank of India and Bank of Maharashtra were below norm of 70 per cent as on March 31, 2011.
Indian Bank is the first and only nationalised bank to have gone for Core Banking Software (CBS) driven identification of NPAs, as early as in June 2010 itself.
This initially raised the gross NPAs to 1.45 per cent and Net NPA levels to 0.83 per cent in Q1 of 2010.
There have, however, been substantial recoveries from NPAs by Indian Bank, thus reducing the non performing assets on quarter to quarter basis in 2010-11. It is noteworthy that all other nationalised banks requested for a breather by deferring the CBS based identification of NPAs to September 2011.
So Indian Bank has totally cleaned its loan book by software based NPA identification and is expeditiously recovering the overdues thus further improving its Asset Quality and booking income from recoveries both in NPAs as well as in technically written off accounts.