PSB bad loans saw significant decline in September: FM

NEWDELHI: Finance minister Nirmala Sitharaman on Monday said public sector banks’ (PSBS) bad loans came down to ₹7.27 lakh crore at the end of September 2019, on host of measures taken by the government to improve financial health of the banks in the country.

“The government has instituted comprehensive reforms in PSBS to improve, governance, underwriting, monitoring and recovery, and has leveraged technology in all aspects of banking, resulting in reduction in their NPAS (non-performing assets),” Sitharaman said in written reply to a question in the Lok Sabha.

She said bad loans of PSBS stood at ₹7.27 lakh crore at the end of September 2019, down from ₹8.96 lakh crore at the end of March 2018.

“Record recovery of ₹2.03 lakh crore over the one-and-a-half year period ending September 2019, 12 out of 18 PSBS reporting profit in the first half of the current financial year, and the highest provision coverage ratio in seven-and-a-half years,” she said.

She said the Banking Trend Report published by the RBI in December observed that the health of the banking sector hinges on a turnaround in macroeconomic conditions.

In a separate development on Monday, Sitharaman met industry representatives on the proposed direct tax dispute resolution scheme that provides opportunity to taxpayers to pay outstanding taxes and get waiver of interest and penalty. With over ₹9 lakh crore worth direct taxes locked up in litigation, the government last week introduced ‘Direct Tax Vivad se Vishwas Bill, 2020’ in the Lok Sabha. Once passed by Parliament, the scheme would be notified and rules would be framed. “During the meeting, industry associations gave their suggestions for the scheme,” a person familiar with the matter said.