The Gross Non-Performing Property (GNPA) ratio steeply declined, dropping to three.12 per cent in September 2024.
Demonstrating continued momentum, the PSBs have registered a internet revenue of Rs 85,5206,000 crore within the first half of 2024-25.
Along with their stellar efficiency, PSBs have contributed considerably to shareholder returns, paying a complete dividend of Rs 61,964 crore over the previous three years.
This outstanding monetary progress underscores the sector’s operational effectivity, improved asset high quality, and stronger capital base, the Ministry stated including that this landmark achievement displays the sector’s strong turnaround, underpinned by a major enchancment in asset high quality.
The Finance Ministry added that past their monetary achievements, these banks have performed a key function in selling monetary inclusion. They’ve applied essential authorities schemes just like the Atal Pension Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana, to call a number of. These efforts have ensured that important advantages attain underserved sections of society. The federal government of India has actively supported the sector with reforms, welfare measures, and powerful insurance policies.This has strengthened the banking system, fostering better transparency, stability, and inclusivity.
The Gross NPA ratio of Public Sector Banks (PSBs) has witnessed a outstanding enchancment, declining to three.12 per cent in September 2024 from a peak of 14.58 per cent in March 2018. This vital discount displays the success of focused interventions geared toward addressing stress inside the banking system.
A turning level got here in 2015 when the Reserve Financial institution of India (RBI) initiated the Asset High quality Assessment (AQR). This train aimed to establish and deal with hidden stress in banks by mandating the clear recognition of NPAs.
It additionally reclassified beforehand restructured loans as NPAs, leading to a pointy improve in reported NPAs.
The heightened provisioning necessities throughout this era impacted the monetary parameters of banks, limiting their skill to lend and assist productive sectors of the economic system.
One other indicator of the improved resilience of Public Sector Banks (PSBs) is their Capital to Danger (Weighted) Property Ratio (CRAR), which rose by 3983 foundation factors to fifteen.43 per cent in September 2024, up from 11.45 per cent in March 2015.
This substantial enchancment not solely highlights the renewed stability and robustness of India’s banking sector but additionally positions PSBs to raised assist financial progress. Notably, this CRAR far exceeds the Reserve Financial institution of India’s (RBI) minimal requirement of 11.5 pere cent, underscoring the strengthened monetary well being of those establishments.