Completing its 100% migration to system-based NPA recognition, in an interview to CNBC-TV18, R Ramachandran, chairman and managing director of Andhra Bank says its is one of the reasons why the bank's NPAs have gone up in Q2.
Post the Q2 results declared today, he says the bank's MFI exposure is at Rs 250 crore and he has not seen any delinquencies in MFI loans. Further, he says, "in the long-term NIMs (net interest margins) will be stabilising at 3.25% and 3.5%." Below is an edited transcript of R Ramachandran's interview to CNBC-TV18. Also watch the accompanying video. Q: Asset quality seems to be a bit of problem right now and gross NPAs have definitely increased, is there any particular sector that is giving you trouble at the moment, the agricultural sector even on the power side? A: We have declared results after doing 100% system generated NPA, we have gone through that and our software has picked up more than one lakh thirty thousand accounts below one lakh category. As a result of which particularly our agricultural sector, the NPAs have gone up by more than Rs 500 crore in this particular quarter. Hence, it is one of the reasons why our NPAs have gone up. Going forward, more than 50% of this can be recovered before the end of this financial year because these are not accounts that are likely to slip further. It is just that the system has captured it and traditionally Andhra Bank has been position to affect good recoveries out of its agricultural advances. We are pretty confident that substantial portion of it will be recovered, unless and until there are external reasons. Q: Would it be safe to say that the transition to system based recognition is now done and you donDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
