New Delhi, December 26 (IANS). The Finance Ministry in its annual review said that the condition of India’s banking sector has improved significantly due to the government’s policy of resolution of stressed accounts, recapitalization and implementing reforms in banks.
Due to this, there has been a huge decline in the NPA (non-performing assets) of banks. Also, profits have reached record levels.
The Finance Ministry said that the gross NPA of scheduled commercial banks has declined from a high of 11.18 percent (Rs 10.36 lakh crore) in March 2018 to 2.67 percent (Rs 4.75 lakh crore) in June 2024.
The gross NPA of public sector banks has declined from a high of 14.58 percent (Rs 8.96 lakh crore) in March 2018 to 3.32 percent (Rs 3.29 lakh crore) in June 2024.
NPA is the loan which has not generated income or interest on the principal amount for a certain period for the banks. If the person taking the loan has not paid the interest or principal amount for at least 90 days, the principal amount is declared NPA by the bank.
The Finance Ministry said that there has been a significant improvement in the assets quality and due to this the Provisional Coverage Ratio (PCR) of scheduled commercial banks has improved to 92.52 percent by June 2024, which was 49.31 percent in March 2015.
Similarly, PCR of government banks has increased to 93.36 percent in June 2024, which was 46.04 percent in March 2015.
Provisional Coverage Ratio (PCR) is the ratio or amount that is kept by the bank to recover the loss incurred from bad loans.
All scheduled commercial banks have reported the highest-ever net profit of Rs 3.50 lakh crore during FY 2023-24, up from Rs 2.63 lakh crore in FY 2022-23.
All public sector banks have recorded the highest ever profit of Rs 1.41 lakh crore in the financial year 2023-24, which was Rs 1.05 lakh crore in the financial year 2022-23.
Public sector banks have given a dividend of Rs 27,830 crore to shareholders in the financial year 2023-24. The government’s share in this was Rs 18,013 crore.
—IANS
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