New Delhi, May 1 (KNN) In a concerning development, Central Bank of India, a prominent public sector lender, has reported fresh slippages from various sectors, including Micro, Small, and Medium Enterprises (MSMEs), retail, corporate, and agriculture, during the fourth quarter of the financial year 2023-24.

According to MV Rao, the Managing Director and Chief Executive Officer of Central Bank of India, the bank has witnessed slippages amounting to Rs 1,175 crore in the reporting quarter, a significant increase from the Rs 643 crore recorded in the previous quarter.

A loan is classified as a Non-Performing Asset (NPA) when the borrower fails to repay the interest or principal for a period of 90 days or more, requiring banks to set aside provisions to cover such loans.

The slippage ratio, which measures the proportion of loans turning into NPAs, stood at 0.57 per cent as of March 2024, a slight improvement from 0.70 percent a year ago.

However, the bank has set a guidance of maintaining a slippage ratio below 0.50 per cent on a quarterly basis for the current financial year, as per its investor presentation.

Despite the fresh slippages, Central Bank of India's gross non-performing asset (NPA) ratio remained unchanged at 4.50 per cent from the previous quarter, but showed a substantial decline from 8.44 per cent a year ago.

Similarly, the net NPA ratio stood at 1.23 per cent as of March 2024, marginally lower than 1.27 per cent in the previous quarter and 1.77 per cent a year ago.

In the January-March quarter, Central Bank of India reported a 41.1 per cent year-over-year increase in net profit, reaching Rs 807.34 crore for the fourth quarter of the financial year 2024-25. On a sequential basis, the net profit rose by 12.5 per cent.

As the bank grapples with rising non-performing assets across sectors, it remains to be seen how effectively Central Bank of India will manage its asset quality and maintain its financial stability in the face of ongoing economic challenges.

(KNN Bureau)