The hundred years old Maharashtra based Multi-State Schedule Bank- NKGSB Cooperative Bank has released its 2019-2020 financial reports. During the financial year 2019-20 the bank has not performed satisfactorily due to several reasons including the fallout of the PMC Bank scam. The bank has had an increase in NPAs and reduction in profits.
Considering the slowdown in the economy since the beginning of the financial year 2019-20 there is a slight increase in NPA but the bank’s most of the advances are secured by more than 100 % collateral and the bank has initiated appropriate legal steps for recovery of dues.
The statement released by the bank reads, “The PMC Bank fallout had a cascading effect on Urban Co-operative Banks. The RBI vide its letter dated April 20, 2020 has asked UCBs having exposure on PMC Bank to provide 20% of their exposure each year over a period of 5 years commencing from the F.Y. 2019-20. This has an adverse effect on the financials of a large number of UCBs”.
“Our Bank, due to exposure with the PMC Bank has to provide Rs 15.40 cr. per year commencing from F.Y. 2019-20. This exposure on PMC Bank raised Gross and Net NPA of the Bank by about 1 ½% which was beyond our control. This has an adverse effect on the Profitability of the Bank”, it reads.
In the previous year, Gross NPA stood at Rs 200.80 cr. i.e. 3.82% of advances and Net NPA at Rs 88.58 cr. i.e. 1.72% of the advances. During the F.Y. 2019-20, NPAs increased substantially. Gross NPA stood at Rs 361.07 cr. i.e. 7.36% and Net NPA at Rs 243.78 cr. i.e. 5.09% of the advances.
The business mix stood at Rs 12,780 cr. as on March 31, 2020 as against Rs 12,852 cr. as on March 31, 2019, a negative growth of Rs 72 cr. Advances stood at Rs 4,904 cr., as on March 31, 2020 as against Rs 5,251 cr. as on March 31, 2019, a negative growth of Rs 347 cr whereas deposits increased from Rs 7,601 cr. to Rs 7,876 cr. as on March 31, 2020 with a growth of Rs 275 cr.
Since the inception NKGSB Bank has always been in profit. The Net Profit stood at Rs 3.07 cr. for the year 2019-20. With a legacy of more than 100 years, professional management, sound networth & capital adequacy, and adequate liquidity, NKGSB Bank continues to offer excellent services to its customers.
The CD ratio of the bank stood at 62% compared to 69% last year. Owned funds stood at Rs 781.22 cr.
It further reads that Managing Director Chintamani Nadkarni who was to retire in February, 2021 has taken an early retirement and Uday Shetye, having over 39 years of rich experience in Co-operative banking has joined NKGSB Bank, at present as “Deputy Managing Director” and in due course will be appointed as “Managing Director” subject to approval of RBI.
The bank was established in September 1917. The bank has a network of over 108 branches spread across Maharashtra, Goa, Karnataka, Gujarat and Madhya Pradesh.
Due to the restrictions imposed on public gathering because of the ongoing Covid 19 pandemic, the Bank will be conducting its 103rd AGM by Other Audio Visual Means (OAVM) on 25th November, 2020.