Returning To The Red

What were the factors responsible for this debacle?

Making perhaps the heroic assumption that the published figures reveal the true picture of banks' balance sheets and profit & loss accounts, some of the reasons are given here.

First, the Indian Bank imbroglio, with massive loan loss provisions turning a 1994-95 Rs 14.26 crore net profit into a Rs 1,336.40 crore loss contributed substantially to the combined loss. The other banks which saw a net loss were the Punjab National Bank (PNB), the Central Bank of India, UCO Bank, United Bank, Vijaya Bank and Punjab & Sind Bank (P&SB).Of these, however, the Central Bank of India lowered its net loss during 1995-96.

On the other hand, the Union Bank of India and the Indian Overseas Bank (IOB) did worse in 1995-96 than in 1994-95.

Larger provisions in 1995-96