Stressed and not showing: Covid-19 relief hides true picture about banks

Banks seem to be doing better as India's economy recovers from the Covid-19 devastation. But be prepared for shocks when a true picture emerges, writes Devangshu Datta

Third quarter results of Financial Year 2020-21 showed an economy in the early stages of rebound. Banking did better. A sample of 34 listed banks registered net profits of Rs 30,689 crore on revenues of Rs 4.01 trillion. In the same quarter of the previous fiscal (October-December 2019), the same sample had net losses of Rs 6,058 crore on total income of Rs 3.63 trillion.

Look deep though and there are signs that this performance doesn’t present the real picture in banking. While credit growth (non-food) was low at around 5.9 per cent Year on Year (YoY), banks benefited from lenient