New Delhi: The Union Finance Minister, Nirmala Sitharaman, conducted a meeting to discuss the performance of Public Sector Banks (PSBs) on various financial parameters such as credit deployment, profitability, asset quality, and capital adequacy. The meeting indicated that the PSBs had significantly improved their performance, and the bankers who participated expressed confidence in withstanding macroeconomic shocks owing to the strong financial health of PSBs.
During the review meeting, the Minister had discussions with the heads of PSBs on the positive macro trends, improved business sentiments, ‘Twin balance sheet advantage,’ and performance of PSBs. All the major financial parameters suggest that banks are resilient, adequately capitalized, and possess sound financial health.
It was noted that the asset quality of PSBs has improved significantly with gross NPAs at 4.97% and net NPAs at 1.24% in March 2023. During FY 2022-23, PSBs earned a record aggregate net profit of around ₹1.05 lakh crore, almost triple from net profits earned in FY 2013-14.
Strengthened by high capital adequacy of 15.53% CRAR, clean balance sheets supported by a healthy provision coverage of 90.68% and improved resilience, PSBs are well positioned to support the credit needs of the productive sectors of the growing economy.
Bankers were of the view that the PSBs are comfortably placed to withstand any macroeconomic shock with their strong financial health. Sitharaman emphasized banks’ adherence to the regulatory framework by focusing on risk management and business diversification. The business outlook is progressively improving, despite the headwinds from recent global banking sector developments.
In the review meeting, the Minister noted that while the overall Priority Sector Lending (PSL) had exceeded the mandated target, the PSL targets in the sub-categories needed to be met, including agriculture, particularly for small, marginal farmers, and micro-enterprises.
Further, the Minister plans to chair meetings in July-August 2023 in different regions of the country to review the functioning of the Regional Rural Banks (RRBs) along with their sponsor banks, with a special focus on the status of technological upgradation of the RRBs. The review of the RRBs would commence on 21st July 2023 at Tripura, in which the Union Finance Minister will conduct a review of the functioning of the RRBs in the Northeast. Meetings will be held by the Minister region-wise in the North, West, South, East, and Central parts of the country to review the functioning of the RRBs along with corresponding sponsor banks.
To improve lending under PMSVANidhi, it was decided that Union Minister of State (Finance), Dr Bhagwat KishanraoKarad, will ensure a special drive for expanding the coverage of PMSVANidhi with the assistance of Urban Local Bodies (ULBs). Dr Karad will visit different regions of the country in 6 phases before 1st September 2023 for the special credit outreach drive on PMSVANidhi.
Major financial parameters like credit deployment, profitability, asset quality, capital adequacy etc. indicate that performance of PSBs significantly improved and bankers are confident of withstanding macroeconomic shocks.
Union Finance Minister Nirmala Sitharaman chaired a meeting to review performance of Public Sector Banks on major financial parameters like- credit deployment, profitability, asset quality, capital adequacy and a few others, which indicate that performance of PSBs significantly improved. The bankers participated in the meeting, expressed confidence of withstanding macroeconomic shocks owing to strong financial health of PSBs.
During the review meeting, discussions were held with the heads of PSBs on the positive macro trends, improved business sentiments, ‘Twin balance sheet advantage’and performance of PSBs. All the major financial parameters suggest that banks are adequately capitalised, resilient and have sound financial health.
It was noted that the asset quality of PSBs has improved significantly with gross NPAs at 4.97% and net NPAs at 1.24% in March 2023. During FY 2022-23, PSBs earned a record aggregate net profit of around ₹1.05 lakh crore, almost triple from net profits earned in FY 2013-14.
Strengthened by high capital adequacy of 15.53% CRAR, clean balance sheets supported by a healthy provision coverage of 90.68% and improved resilience, PSBs are well positioned to support the credit needs of the productive sectors of the growing economy.
Bankers were of the view that with strong financial health, they are comfortably placed to withstand any macroeconomic shock. Sitharaman emphasised banks’ adherence to the regulatory framework by focusing on risk management, and diversification of business base. The business outlook is progressively improving in spite of the headwinds from recent global banking sector developments.
The minister noted that while the overall Priority Sector Lending (PSL) has exceeded the mandated target, the PSL targets in the sub-categories should also be met, including interaliaagriculture— particularly the small & marginal farmers and the micro enterprises.
The minister will also chair meetings in the month of July-August 2023 in different regions of the country to review the functioning of the Regional Rural Banks (RRBs) along with their sponsor banks, with a special focus on the status of technological upgradation of the RRBs.
The review of the RRBs would commence from 21st July 2023 at Tripura, in which the Union Finance Minister will conduct a review of the functioning of the RRBs in the Northeast. Meetings to review the functioning of the RRBs, along with the corresponding sponsor bank, will then be held by the Minister region-wise in the North, West, South, East, and Central parts of the country.
On improving lending under PMSVANidhi, it was decided that Union Minister of State (Finance), Dr Bhagwat KishanraoKarad will ensure a special drive for expanding the coverage of PMSVANidhi, with the assistance of the Urban Local Bodies (ULBs). Dr Karad will visit different regions of the country in 6 phases before 1st September 2023 for the special credit outreach drive on PMSVANidhi.
