With a healthy growth of 56 percent, the banking sector's cash recovery against Non-Performing Loans (NPLs) rose to Rs 48 billion during the first half (Jan-June) of current calendar year (CY17) supported by improved economic activity. Bankers said that the higher cash recovery against NPLs is a very positive and encouraging sign for entire banking industry and it is also evident that banking sector is striving to reduce the burden of NPLs.

They said that previously NPLs recovery was on slow pace due to sluggish economic activities owing to energy crisis, higher interest rate and poor law and order situation. However, as of now the economy is gradually improving and some surge has been witnessed in cash recovery against NPLs, they added.

According to State Bank of Pakistan's (SBP) statistics, banking sector's (including all banks and DFIs) cash recovery against NPLs stood at Rs 48.695 billion during the first half of CY17 compared to recovery of Rs 31.271 billion in the same period of last year CY16, depicting a significant increase of 56 percent or Rs 17.424 billion.

With 54 percent growth or Rs 16.698 billion, all banks' cash recovery against NPLs surged to Rs 47.47 billion during Jan-June of 2017 compared to Rs 30.774 billion in the corresponding period of last year (CY16). During the period under review, recovery by DFIs increased by 146 percent to Rs 1.224 billion.

Quarter-on-quarter basis, analysis show that cash recovery against NPLs has improved during the second quarter of CY17 as recovery moved up by 148 percent during April-June 2017 compared to Jan-March 2017. Cumulatively, banks and DFIs made a cash recovery of Rs 34.705 billion during second quarter of CY17 against Rs 13.99 billion in first quarter of CY17, showing an increase of Rs 20.715 billion.

Copyright Business Recorder, 2017