Our Bureau The Centre is confident of several public sector banks (PSBs) turning profitable at the end of the current fiscal, Interim Finance Minister Piyush Goyal said here on Monday.

All the 21 PSBs recorded operating profits at the end of FY18, but due to higher provisioning, all of them, barring Vijaya Bank, recorded net losses. At the end of September 2018, the PSBs together recorded an operating profit of ₹36, 757 crore. Many are expected to be back in the black at the end of this fiscal, said Goyal.

Govt assures support

“The government assures all support to PSU banks. We are confident that they will become more vibrant and profitable in the days to come,” he said after a day-long meeting with PSB bankers.

The meeting also discussed measures to promote MSME loans, housing loans and agriculture lending besides reviewing the financial performance of the banks. Goyal added that the recent amendment to the Prevention of Corruption Act has given confidence to bankers in taking commercial decisions.

According to a Finance Ministry statement, the review was against the backdrop of visible signs of strengthening of the financials of PSBs as a result of the government’s comprehensive ‘4R’ approach of Recognition, Resolution, Recapitalisation and Reforms, which has positioned PSBs to step up their support to meet the lending needs of a growing economy.

PSBs have committed to significantly step up domestic credit growth from 9.1 per cent year-on-year at the end of the second quarter of FY19, the statement added.

This came on the back of recapitalisation of PSBs by over ₹2.6 lakh crore and recovery of over ₹2.8 lakh crore — including a record recovery of over ₹1 lakh crore in the first three quarters of the current fiscal — since the clean-up began in 2015, and comprehensive reforms for better underwriting of loans, it added.

The meeting specifically discussed measures to support MSMEs. In the backdrop of the recently approved MSME Restructuring Scheme and the 12-point agenda for supporting MSMEs announced by Prime Minister Narendra Modi at the launch of the MSME Outreach and Support Programme, PSBs have committed to step up lending to the sector.

Bankers upbeat p6

Related Topics
comment COMMENT NOW