PSBs made Rs 4.24 lakh crore recovery in last four years

The public sector banks (PSBs) have effected record recovery of Rs 4.24 lakh in the last four years and first quarter of the current financial year, the finance ministry said in a tweet on Sunday (18 December 2022).

The ministry was explaining the effects of recapitalisation and reforms undertaken by the government in the financial health of the country’s PSBs.

“All PSBs are in profit and recorded an all-time high aggregate net profit of ₹66,543 crores in FY22, the finance ministry said in a series of tweets on Sunday (18 December),” says the ministry.

In 2021-22, PSBs reported a record Rs 66,543 crore profit and paid a record dividend f Rs 13,170 crore of which Rs 8,718 crore was received by the government, which is the majority shareholder in all these banks.

The government has infused Rs 3,10,997 crore to recapitalise banks during since 2016-17, out of which Rs 34,997 crore were sourced through budgetary allocation and Rs 2,76,000 crore through issuance of recapitalisation bonds to these banks.

According to the finance ministry, the asset quality of the banks has also improved with Gross Non-performing Assets (NPAs) falling from Rs 8.96 lakh crore (14.58%) in March 2018 to Rs 5.31 lakh crore (6.9%) in June 2022.

Net NPA ratio also improved from 7.97% in March 2018 to 2.04% in June 2022.

Capital adequacy ratio of the PSBs have also improved significantly with CRAR improving by 303 basis points from 11.7% in March 2018 to 14.4% in June 2022.

Provision coverage ratio also improved during the period from 62.7% in March 2018 to 83.8% in June 2022, reflecting increased resilience.

Earlier, the government had in the parliament said that PSBs had recovered Rs 1.03 lakh crore of written off loans in the last five years.

Meanwhile, the government said that total amount of loan written off by scheduled commercial banks in the last five years has crossed Rs 10 lakh crore.

State Bank of India accounted for Rs 204,486 crore of the written off loans followed by PNB (Rs 67,214 crore), Bank of Baroda (Rs 66,711 crore) and ICICI Bank (Rs 50,514 crore).

Also See: Public sector banks recovered Rs 1.03 lakh crore written-off loans in last five years