FI sanctions, disbursements up in 2005-06

15 November 2006

Mumbai: Financial assistance sanctioned by financial institutions (FIs) witnessed a rise of about 39 per cent at Rs27,239 crore while disbursements rose by about 34 per cent to Rs20,522 crore, the Reserve Bank of India (RBI) said in its report on trend and progress of banking in India 2005-06.

Reversing last year's trend, the financial assistance sanctioned and disbursed by the financial institutions in 2005-06 increased significantly. The asset quality, profits and capital adequacy ratio of the FIs also improved during the period, the report said.

FIs also witnessed an improvement in their asset quality, both in absolute and related net loans. Net NPAs of FIs like IFCI, IIBI and TFCI declined sharply during the year. At the end of March 2006, NABARD and NHB had no NPAs while NPAs of Exim Bank and SIDBI were at less than one and two per cent, respectively the report said.

While the assets and liabilities of FIs during the period, however, remained more or less at the same rate as of 2004-05, the report noted a further shift in asset portfolio of FIs away from investments to fund and an increased demand for loans and advances during 2005-06.

The amount of resources raised by FIs during 2005-06 were marginally lower than those raised during 2004-05. Among FIs, NABARD mobilised the largest amount of resources, followed by Exim Bank, NHB and SIDBI.

The net interest income of select all-India FIs increased to Rs2,555 crore during 2005-06 from Rs2,125 crores during 2004-05.