Indian Banking Sector Shows Strong Resilience, Government Policies Proving Effective: Leading Bankers

New Delhi, Dec 12 (NationPress) As Rahul Gandhi’s accusations about the poor state of Indian banks, notably public sector banks (PSBs), dwindled, Dinesh Khara, the former Chairman of State Bank of India (SBI), stated on Thursday that the nation's banking sector is operating efficiently on all fronts including capitalisation and asset quality.

Speaking to IANS, Khara remarked that the banking sector in India is functioning in a highly professional and efficient manner, maintaining a robust health.

He further emphasized that all banks have been adequately capitalized, ensuring that capital adequacy meets established criteria.

“With enhancements in asset quality, the overall health of the sector remains strong, and this stability is crucial for supporting the country's economic development,” he conveyed to IANS.

Khara noted that India’s global perception is favorable and under Prime Minister Narendra Modi’s leadership, the country’s acceptance internationally has significantly increased.

“Following the G20 Summit, this perception has further improved. India is being recognized as a responsible leader in South Asia,” he pointed out.

Addressing concerns about the morale of employees being affected by politically charged statements, Khara stated that the morale of banking employees is influenced by leadership within the sector.

“Additionally, all bank employees comprehend that in a democracy, everyone has the right to voice their opinions,” he added.

“It is understood that those employed in banks are well-informed about the banking situation. Hence, I believe they do not require any extra information to grasp the current state of the banking sector and their respective banks,” he further explained.

His remarks came in response to Union Finance Minister Nirmala Sitharaman's strong rebuttal of allegations made by the Leader of Opposition (LoP) in Lok Sabha, Rahul Gandhi, regarding the performance of India’s banking sector, particularly Public Sector Banks (PSBs), asserting that during the tenure of the United Progressive Alliance (UPA), PSBs were utilized as ‘ATMs’ for their 'cronies and dubious businessmen'.

Rajiv Kumar Bakshi, the former Chairman of Bank of Baroda, informed IANS that the banking sector is currently in excellent condition.

“The banking sector is in a robust state now, and the credit cost has decreased. The risks associated with banking have also diminished. This is an opportune time for banking,” he stated.

“The government’s banking policies are functioning exceptionally well, and the economy has seen improvement. Even during the Covid-19 pandemic, when numerous businesses faced closures, the government managed the overall situation adeptly. They took decisive measures that have bolstered the sector,” he added.

Ravi Kishan Takkar, Former MD and CEO of UCO Bank, mentioned that the current condition of the banking sector in India is quite favorable. Over the last decade, the health of Public Sector Banks (PSBs) has improved on multiple fronts, including NPA, capital adequacy, and profits. In 2015, when the gross NPA of PSBs hit 14 percent, it has now fallen to 3 percent. During this timeframe, PSB profits surged to Rs 1.50 lakh crore from significant losses.

He further stated that government banks are focused on serving the general public, with increased emphasis on the middle class and small industries.