In recent years, the problem of over-dues of commercial banks has become alarming. According to a recent estimate, the total over-dues of public sector banks had reached Rs. 9,733 crores in June 1987, which constituted nearly 17 per cent of their total outstanding advances.
Of this, over-dues from the agricultural sector accounted for Rs. 2,239 crores, i.e., 23 per cent of the total.
Other priority sectors accounted for Rs. 1,627 crores, i.e., 17 per cent of the total. This means over-dues accounted for 40 per cent of the total priority sectors (including agriculture).
Again, small scale industries (including industrial estates) accounted for about Rs. 1,937 crores, i.e., nearly 20 per cent of the total.
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The large and medium sector industry had over-dues of Rs. 2,613 crores, i.e., around 27 per cent of the total while the over-dues of all other sectors amounted to Rs, 1,316 crores, i.e., 13.5 per cent of the total.
The government is keen on clearing the over-dues by introducing a Recovery Bill in the Parliament soon.
It has been observed that the banks are unable to take any drastic action against borrowers when the overdue matters are taken to the civil courts.
Hence, a recovery legislation plan is needed and special courts may be established to deal with the problem.