NEW DELHI New Delhi: Public sector banks (PSBs) in India have reported the highest-ever aggregate net profit of Rs 1.41 lakh crore in fiscal year 2023-24, the Finance Ministry said on Sunday. The gross non-performing assets (GNPA) ratio fell sharply to 3.12 per cent in September 2024. Demonstrating continued momentum, they reported a net profit of Rs 85,5206,000 crore in the first half of 2024-25. Apart from its stellar performance, the PSB has contributed significantly to shareholder returns by paying a total dividend of Rs 61,964 crore in the last three years. This significant financial growth underlines the sector's operational efficiency, improved asset quality and strong capital base. Beyond their financial achievements, these banks have played an important role in promoting financial inclusion. He has implemented important government schemes like Atal Pension Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana.
A turning point came in 2015 when the Reserve Bank of India (RBI) initiated the Asset Quality Review (AQR). The objective of this exercise was to identify and address hidden stress in banks by mandating transparent identification of NPAs. It led to reclassification of previously restructured loans as NPAs, resulting in a sharp increase in reported NPAs. The ministry said increased provisioning requirements during this period impacted the financial parameters of banks, limiting their ability to lend and support productive sectors of the economy.
Another indicator of the improved resilience of public sector banks is their capital to risk (weighted) asset ratio (CRAR), which increased by 3,983 basis points to 15.43 per cent in September 2024 from 11.45 per cent in March 2015. Specifically, it CRAR is much higher than the Reserve Bank of India (RBI) minimum requirement of 11.5 per cent, which reflects the strong financial health of these institutions. Underlines.Public sector banks in India have made remarkable progress in recent years, have achieved unprecedented financial achievements and have contributed significantly to the economic stability and development of the country.
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