In a concerning development for Jharkhand's banking sector, non-performing assets have breached the critical ₹8,000 crore mark despite showing marginal improvement in percentage terms, according to the latest state-level bankers' committee report.
The NPA Paradox: Percentage Down, Absolute Value Up
The recently released SLBC report reveals a paradoxical situation where the NPA ratio decreased from 5.41% on September 30, 2024, to 5.23% on September 30, 2025, marking a decline of 3.16%. However, in absolute terms, the bad loans surged from ₹7,809 crore to ₹8,308.59 crore during the same period, representing an increase of nearly ₹500 crore.
This alarming rise has raised serious concerns among banking officials and financial experts. The report explicitly states that crossing the ₹8,000 crore mark represents a serious state of affairs that could negatively impact the financial situation, profitability, and liquidity of banks operating in the state.
Bank-wise Performance and Recovery Challenges
The SLBC data presents a mixed picture across different banks. Several institutions have managed to maintain relatively healthy NPA ratios, including Bank of Maharashtra (0.49%), Federal Bank Limited (1.02%), State Bank of India (1.38%), and HDFC Bank Limited (1.41%). Canara Bank and Jharkhand State Rural Bank also showed respectable figures at 3.07% and 2.85% respectively.
However, the situation appears grim for UCO Bank, which recorded the highest NPA at 17.10%. Bank of India and Punjab National Bank followed with NPAs hovering around 14% each, indicating significant stress in their loan portfolios.
Mounting Recovery Backlog and Government Intervention
Banks have initiated multiple recovery mechanisms to tackle the rising NPAs, including filing certificate cases and approaching the Debt Recovery Tribunal. However, the process faces substantial hurdles with thousands of cases pending resolution.
As of September 30, 2025, 48,824 certificate cases worth ₹1,529.22 crore and 4,489 DRT cases amounting to ₹2,374.05 crore were awaiting disposal, creating a massive recovery backlog.
Bank officer Ajit Kumar revealed that during the recent SLBC meeting, bankers urgently requested the state government to provide magistrates and security forces when banks attempt to take possession of defaulters' properties. "The bankers also emphasized the need to issue notices to the maximum number of defaulters in certificate cases to accelerate the recovery process," Kumar added.
The report has called for banks to strengthen their risk evaluation processes while sanctioning loans to prevent further deterioration of asset quality. The banking sector's ability to recover these massive bad loans will significantly influence Jharkhand's economic health in the coming months.
