Net profit of PSBs almost tripled to ₹1.04 lakh in FY2022-23: FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman praises state-run banks for their profitability, citing their professionalism in management. She highlights that the net profit of public sector banks has nearly tripled and NPAs are estimated to reduce further.

Staff Writer
Updated1 Jul 2023, 02:34 PM IST
Union Finance Minister Nirmala inaugurates the Punjab and Sind Bank Branch
Union Finance Minister Nirmala inaugurates the Punjab and Sind Bank Branch(Hindustan Times)

Finance Minister Nirmala Sitharaman on Saturday appreciates the state-run banks for becoming profiteering. She said that the d despite the stable rating outlook, some global banks collapsed but Indian banks are doing well because of professionalism in management. According to the union Finance Minister, the net profit of public sector banks has almost tripled to 1.04 lakh crore in fiscal 2022-23. "The Non-Performing Assets (NPAs) of the Indian banks is estimated to reduce further to a decadal low of 3.8% by end of FY 2023-24," Sitharaman said citing data from the credit rating agency Crisil.

She said performance of public sector banks have improved on account of various initiatives taken by the Modi government since 2014. There was an improvement in all critical parameters like return on asset, net interest margin and provisioning coverage ratio.

"Before our Govt came to power in 2014, difficulty in the Indian banking system actually started because of irrational 'Phone Banking' which happened during the tenure of the UPA governement. Back then, the priority in lending was given to not-so-worthy customers in an unprofessional manner; as a result, they became NPAs," she said.

Stressing incorporating the corporating governance policies, Sitharaman urged banks to ensure prudent liquidity management. She also asked banks to adhere to regulatory norms, and focus on robust asset liability and risk management elements.

The FM was speaking at the inauguration of the new corporate office of Punjab & Sind Bank in New Delhi.

Praising the Centre, FM Nirmala Sitharaman added that the Indian economy has moved away from the twin-balance sheet problem of banks and corporates to twin-balance sheet advantage because of the concerted efforts of the Modi government.

The twin-balance sheet problem refers to the deterioration in the financial health of banks and corporates at the same time.

“As a result (of various initiatives of the government) I'm glad to say the problems of twin-balance sheets have gone away like the Reserve Bank observing it is a twin-balance sheet advantage that the Indian economy is benefiting from,” Sitharaman said.

The finance minister said that PM Modi-led Central government timely realised that banks were going through crisis. However, the government's 4R formula--Recognition, Resolution, Recapitalisation, and Reforms made the banks stable and posted good profits.

Earlier this year, the finance minister advised the state-run banks to remain vigilant and identify stress points after the collapse of the Silicon Valley Bank in the US. At the time, Sitharaman urged the PSBs to look at business models closely to identify stress points, including concentration risks and adverse exposures. Sitharaman had encouraged banks to use the incident as an opportunity to frame detailed crisis management and communication strategies.

 

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First Published:1 Jul 2023, 02:34 PM IST
HomeNewsIndiaNet profit of PSBs almost tripled to ₹1.04 lakh in FY2022-23: FM Nirmala Sitharaman

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