PSBs strongly capitalised and ready to fuel economic growth: FinMin

The performance of public sector banks (PSBs) indicates that they are adequately capitalised and well poised to meet the credit demands of all sectors of the economy, with a special thrust on agriculture, micro, small and medium enterprises (MSMEs), and the infrastructure sector, said the finance ministry in a statement on Thursday.

 

According to data provided by the finance ministry, PSBs have shown a record net profit growth of 31.3 per cent year-on-year (Y-o-Y), achieving the highest-ever aggregate net profit of Rs 1,29,426 crore and an aggregate operating profit of Rs 2,20,243 crore in the first nine months of the financial year.

   

PSBs have significantly improved asset quality, with a low net non-performing asset (NPA) ratio of 0.59 per cent, and an aggregate net NPA outstanding of Rs 61,252 crore.

 

The aggregate business growth stood at 11 per cent Y-o-Y, with improved aggregate deposit growth of 9.8 per cent Y-o-Y.

 

“The policy and process reforms have resulted in enhanced systems and processes for credit discipline, recognition and resolution of stressed assets, responsible lending, improved governance, financial inclusion initiatives, technology adoption, etc,” said the finance ministry.

 

The total aggregate business of PSBs reached Rs 242.27 lakh crore, with robust credit growth of 12.4 per cent, led by retail credit growth of 16.6 per cent, agriculture credit growth of 12.9 per cent, and MSME credit growth of 12.5 per cent.

 

The statement further noted the build-up of adequate capital buffers, with an aggregate capital-to-risk weighted assets ratio of 14.83 per cent, significantly above the minimum requirement of 11.5 per cent.

 

These measures have led to sustained financial health and robustness of the banking sector as a whole, which is reflected in the current performance of PSBs, the statement added.