Rising NPAs Trouble Rayalaseema Banking Sector
Banking sources indicate that Kadapa, Kurnool and Nandyal districts are recording a gradual but consistent increase in NPAs.
Kurnool: Non-Performing Assets (NPAs) are witnessing a steady rise across the Rayalaseema region as borrowers from various sectors are increasingly failing to repay their loans on time.
Banking officials warn that the trend is not only inflating the NPA burden but also adversely affecting the credit profiles of borrowers, with many seeing a sharp fall in their CIBIL scores. This, in turn, is impacting their ability to secure fresh loans.
As per the RBI norms, NPAs up to 5 per cent are within manageable limits. While the overall average NPA levels in the region hover between 2 and 2.5 per cent, certain sectors are showing alarming stress.
An SBI manager in Kadapa said, “Though the overall NPA percentage appears to be under control, in some segments this is going up to 15 per cent. This kind of sectoral imbalance is a serious concern for banks.”
Banking sources indicate that Kadapa, Kurnool and Nandyal districts are recording a gradual but consistent increase in NPAs. A senior official said, “If the trend continues, it will put additional pressure on the banking system and recovery mechanisms.”
A specific case from Pattikonda constituency highlights the issue. A borrower who had availed a loan of `42 lakh under the medium enterprises category failed to repay the instalments for over two years. A manager of Indian Overseas Bank (IOB) said, “As per norms, the account has now been classified as NPA.”
The agriculture sector, which forms a major portion of lending in the region, is also contributing to the rise in NPAs. Officials note that even crop loan borrowers are failing to repay on time. An SBI official explained, “Crop loans are meant to support farmers, but delays in repayment are increasing. This will ultimately affect farmers themselves as it reduces their eligibility for future credit.”
Particularly worrying is the agriculture infrastructure segment, where NPAs have reached 8.52 per cent. Thousands of borrowers in this category have turned defaulters. A manager from Andhra Pragathi Grameena Bank in Nandyal said, “Issuing auction notices based on timelines is the only option left for banks.”
Even more alarming is the situation in the social infrastructure segment, where default rates are exceptionally high. Nearly 65 per cent of the borrowers in this category have turned defaulters.
A Canara Bank official in Adoni said, “In social infrastructure loans, about 65 out of every 100 borrowers have defaulted. Despite issuing auction notices, there is very little response, making recovery extremely difficult.”
Bankers also point out that rising NPAs in one segment tend to have a cascading effect on the overall lending environment. Increased defaults compel banks to tighten lending norms, which affects even genuine borrowers.
A senior banking official observed, “As NPAs increase, banks will become cautious and may reduce lending. This will have a direct impact on credit flow and economic activity in the region.”
Top 10 Sectors by NPA %
Sector NPA %
Social Infrastructure 65.22
Medium Enterprises 15.13
Agri Infrastructure 8.52
Other Priority Sector 7.64
Micro Enterprises 4.44
Total MSMEs 4.07
Priority Sector (Total) 2.25
Small Enterprises 1.74
Crop Loans 1.73
