Govt: Worst is over for public sector banks
The worst is over for state-run banks with improvements in recovery, operating profits and bad debts ratio when compared with the previous quarter, the finance ministry said on Thursday.
“Resurgent public sector banks (PSBs)—nation’s growth engines, after cleaning put worst behind,” Rajiv Kumar, secretary, department of financial services in the ministry of finance wrote on micro-blogging site Twitter.
He said state-run banks together recovered ₹36,551 crore in the first quarter of 2018-19, which was nearly half of recoveries made in the entire fiscal year 2017-18.
Further, on a quarter-onquarter basis, operating profits of banks have risen by 11.5% and losses have come down by 73.5%, Kumar wrote.
Nineteen of 21 PSBs had reported losses in the last quarter of 2017-18. In the fourth quarter, total losses of state-run banks amounted to ₹62,682 crore. This came down to ₹16,617 crore in the first quarter of 2018-19.
Operating profits also increased to ₹36,632 crore in the quarter ended June, against ₹34,329 crore in the quarter ended March.
He added that asset quality issues have also been addressed through falling non-performing asset (NPA) slippages and improvement in the provision coverage ratio by 2.2 percentage points to 63.8%. Recoveries under the Insolvency and Bankruptcy Code have also helped, he said.
With strengthening balance sheets of state-run banks, the government said these banks will step up focus on responsive banking with the motto of ‘customer first’.
The focus will be to promote digital banking services like internet and mobile banking.
Speaking to reporters, Kumar expressed hope that 11 state-run banks placed under prompt corrective action will come out of the framework this fiscal year.
Kumar also added that the government will capitalize state-run banks as per their requirements.
NEW DELHI: