Thursday 27 January 2022
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Public sector banks recorded net highest profit in 5 years in FY21

Reviewing the public sector banks' performance, Sitharaman assessed various steps taken by them in implementing pandemic-related measures initiated by the union government and RBI

Banks in the public sector recorded a net profit of Rs 31,820 crore in FY 2020-21, the highest in the last five financial years, the state-owned banks’ top officials told Finance Minister Nirmala Sitharaman today. She was informed that public sector banks are “adequately capitalised” and their CRAR as of September 2021 stood at 14.4%, against regulatory requirement is 11.5% (including CCB).

Reviewing the public sector banks’ performance, Sitharaman assessed various steps taken by them in implementing pandemic-related measures initiated by the union government and Reserve Bank of India (RBI) and readiness to tackle disruptions that may occur due to Covid-19 variant Omicron.

While appreciating the success of ECLGS, the finance minister said the collective efforts must strive towards supporting sectors that face interruption due to the continuous onslaught of the Covid-19 pandemic. She said bankers must continue supporting the agriculture sector, farmers, retail sector and MSMEs.

Sitharaman said, “Business outlook is progressively improving in spite of the headwinds from global development and Omicron spread.” She also underlined that contact intensive sectors may require more support to help them fight against the pandemic.

On credit demand, the finance minister said the demand is expected to pick up on account of in retail segments, improvement in overall macroeconomic prospects and improving the financial health of borrowers. During the review meeting, bankers pointed out that public sector banks have observed an improvement in the repayment culture in the country.

  1. Public sector banks recorded a net profit of Rs 31,820 crore in FY 2020-21, highest in the last five financial years.
  2. Net profit of Rs 31,145 crore for the first half of FY2021-22, almost equal to that of FY 2020-21.
  3. Public sector banks have effected a recovery of Rs 5,49,327 crore during the last seven financial years.
  4. Public sector banks are adequately capitalised and their CRAR as of September 2021 is 14.4%, against the regulatory requirement is 11.5% (including CCB).
  5. CET1 of the public sector banks was at 10.79% as on September 2021 against a regulatory requirement is 8%.
  6. Public sector banks recorded year-on-year credit of 11.3% in personal loans, 8.3% in agriculture loans and overall credit growth of 3.5%, as on September 2021.
  7. Under Credit Outreach Programme launched in 2021, the public sector banks have sanctioned an aggregate loan amount of Rs 61,268 crore.
  8. During the Covid-19 pandemic, public sector banks have performed well in various Government schemes like ECLGS (launched in May 2020 to provide particularly to the MSME sector amidst the Covid-19 pandemic), LGSCAS and PM SVANidhi.
  9. Of the extended limit of Rs. 4.5 lakh crore of ECLGS provided by the government, 64.4% or Rs 2.9 lakh crore, sanctioned up to Nov. 2021. Over 13.5 lakh small units survived pandemic due to ECLGS, saved MSME loans worth Rs 1.8 lakh crore from slipping into non-performing assets, and saved livelihood for approx. 6 crore families.

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