The farm loan waiver of up to Rs 1.5 lakh per family announced by Andhra Pradesh Chief Minister Chandrababu Naidu is getting implemented today.
Q3 slippages will be lower than previous quarter
CVR Rajendran
CMD
Andhra Bank
The loan waiver announced by Chief Minister Chandrababu Naidu in Andhra Pradesh is getting implemented today. The CM had few days ago announced that the government has decided to waive farm loans of up to Rs 1.50 lakh per family in the state as per TDP's poll promises. The state government has finalised the list of beneficiaries after synchronising it with Aadhaar cards and ration cards to avoid loopholes.
In an interview to CNBC-TV18, CVR Rajendran, CMD of Andhra Bank , discusses the impact of the move.
Below is the transcript of CVR Rajendran's interview with Sumaira Abidi & Reema Tendulkar on CNBC-TV18.
Sumaira: Could you first take us through what is the exact quantum of exposure that you would have to this. I would imagine it would be the bulk of it and could you tell us how this would materially impact your bank?
A: We had about Rs 1,079 crore of agriculture loans which were taken as non-performing assets (NPA) in the first quarter of this current year. We have provided for Rs 383 crore by way of interest reversals as well as loan provisioning. A major chunk of it will get reversed during the current year because this loan reverse waiver scheme has come. Telangana has announced loan waivers sometime back so out of the loans outstanding 73 percent of the loans where repaid and had got renewed also and remaining 27 percent we are working on Telangana.
Andhra Pradesh today has announced their loan waiver and we have got Rs 5,000 crore for all the banks together and Andhra Bank got about Rs 587 crore in respect of 5.83 lakh farmers accounts. All those loan accounts up to Rs 50,000 will be fully paid so these accounts will get closed immediately and remaining amount up to Rs 1,50,000 loan amount we will get a 20 percent of it paid to the banks and remaining 80 percent is paid by way of bond to the borrowers or beneficiaries. So, with this 20 percent we have to get the remaining 80 percent from the farmers and renew the existing loan -- that is the formula.
Andhra Bank stock price
On December 10, 2014, at 14:14 hrs Andhra Bank was quoting at Rs 87.65, up Rs 3.20, or 3.79 percent. The 52-week high of the share was Rs 110.00 and the 52-week low was Rs 53.50.
The company's trailing 12-month (TTM) EPS was at Rs 6.53 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 13.42. The latest book value of the company is Rs 148.19 per share. At current value, the price-to-book value of the company is 0.59.
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