Bad loans of public sector banks fall to Rs 7.27 lakh crore at end of Sept 2019: Sitharaman

Finance Minister Nirmala Sitharaman on Monday said public sector banks' (PSBs) bad loans came down to Rs 7.27 lakh crore at the end of September 2019, on host of measures taken by the government to improve financial health of the banks in the country.

"The government has instituted comprehensive reforms in PSBs to improve, governance, underwriting, monitoring and recovery, and has leveraged technology in all aspects of banking, resulting in reduction in their NPAs," Sitharaman said in written reply to a question in the Lok Sabha.

She said bad loans of PSBs stood at Rs 7.27 lakh crore at the end of September 2019, down from Rs 8.96 lakh crore at the end of March 2018.

"Record recovery of Rs 2.03 lakh crore over the one-and-half year period ending September 2019, 12 out of 18 PSBs reporting profit in the first half of the current financial year, and the highest provision coverage ratio in seven-and-half years," she said.

She said the Banking Trend Report published by the Reserve Bank of India (RBI) in December observed that the health of the banking sector hinges on a turnaround in macroeconomic conditions.

"The government has taken significant steps towards speeding up the insolvency resolution process under the Insolvency and Bankruptcy Code (IBC) and easing of credit, particularly for the stressed real estate and non-banking financial companies (NBFCs) sectors, and that the impact of critical measures taken to boost investment present green shoots for growth in the second half of 2019-20 and 2020-21."