According to sources in the banking sector in Tripura, the Non-Performing Assets (NPA) position of banks in the state has increased to Rs 98250.75 lakh in 2022 from Rs 76037.56 lakh in 2019. The highest NPA has been identified in the agriculture sector in the state, with experts noting various reasons for this situation.
One major reason cited is that banks in Tripura are not conducting surveys before sanctioning loans for farmers. This lack of due diligence has resulted in farmers not being made aware of their responsibilities and ways to clear loan amounts to banks in a timely manner. Additionally, farmers lack financial education and monitoring, which has also contributed to the NPA in the agriculture sector.
Kiran Bhowmik, a PhD scholar of Economics Department at Tripura University, has said that the main reason for the NPA lies in the beneficiary selection method. He noted that farmers face difficulties in obtaining loans from banks, as they often lack the necessary land documents and farmers’ certificates.
In contrast, the NPA position for the Micro, Small & Medium Enterprises (MSME) sector has decreased to Rs. 23,539.88 lakh in 2022 from Rs. 26,489.4 lakh in 2019. However, the NPA has increased in the Other Priority Sectors (OPS) to Rs: 12,128.71 lakh in 2022 from Rs: 9,999.39 lakh in 2019.
Experts have emphasized that loans can increase output, but only if the loan amount is provided in accordance with the requirements of the borrower. Otherwise, it turns into an NPA. Therefore, organizations like NABARD are crucial in coming forward with a certain amount of funds for research to find out the principal determinants of NPA in Tripura.
Overall, the rise in NPA in Tripura’s banking sector is a cause for concern, and it is important for banks and the government to take steps to address the issue and support borrowers in repaying their loans.
