Finance Minister Nirmala Sitharaman stated on Saturday that the profit of public sector banks has tripled to Rs 1.04 lakh crore over the past nine years as a result of government initiatives. She also emphasised the significance of maintaining the momentum that is fueling the economy.
Public sector banks (PSBs) net profit nearly tripled from Rs 36,270 crore in FY2014 to Rs 1.04 lakh crore in FY23.
When the Punjab and Sind Bank's corporate office opened in New Delhi, the minister said that banks should "build on laurels" by adhering to best practices in corporate governance.
"Banks should not sit back and revel in success. They should follow best corporate governance practices, adhere to regulatory norms, ensure prudent liquidity management, and continue to focus on having robust asset-liability and risk management," she said, focusing on the fact that the Indian economy has created some distance from the 'twin accounting report issue' to the twin balance sheet problem.
Banks now profitable: FM
The finance minister expressed that sometime in the past, the Indian economy dealt with the issue of twin monetary records—weight on the asset reports of banks and corporations simultaneously.
Before the Modi government came to power in 2014, trouble in the Indian financial framework really began on account of nonsensical telephone Banking, which occurred during the residency of the UPA government, she said.
In those days, Sitharaman said, the need for lending was given to not-so-worthy customers in an amateurish way. Therefore, they became NPAs (non-performing assets).
"As a result (of various initiatives of the government), I am glad to say the problems of twin balance sheets have gone away," she said, adding that according to the Reserve Bank of India, it is a twin monetary record advantage that is helping the Indian economy.
Sitharaman stated that the banks "need to build on laurels" after observing that the combined profits of the public sector banks tripled to Rs 1.04 lakh crore in 2022–23 from Rs 36,270 crore in FY14.
The minister made the following observation: "At this stage, it is our duty towards the people of India to ensure that the banks can build on their strength and not lose this momentum that we have achieved."
She stated that the Modi government's various initiatives since 2014 have improved the public sector banks' performance.
She added that all crucial parameters like the provisioning coverage ratio, net interest margin, and return on asset all improved.
The 4R technique followed by the Modi government to revive the state-claimed banks has yielded results, she said.
Recognising the issue of non-performing assets, reinvesting in banks, resolving their issues, and reforming them are all parts of the "4 R" strategy.
Also Read | GST helped increase revenue buoyancy of states as all-round benefit stands out 'exemplary': FM
Also Read | Aim to double every four years: HDFC Bank MD after merger
