Public Sector Banks Witness Drop in Gross NPA to 3.12% Over a Decade, FY24 Net Profit Reaches ₹1.41 Lakh Crore: Government

New Delhi, Dec 12 (NationPress) The gross non-performing asset (NPA) ratio for public sector banks (PSBs) has seen a significant reduction to 3.12% as of September this year, down from 4.97% recorded in March 2015 and from a high of 14.58% in March 2018, as per the information provided by the Centre on Thursday.

The Ministry of Finance released a statement indicating that public sector banks (PSUs) achieved the highest cumulative net profit of ₹1.41 lakh crore during the fiscal year 2023-24, an increase compared to ₹1.05 lakh crore in FY2022-23, with a net profit of ₹0.86 lakh crore in the first half of FY2024-25.

According to the ministry, the gross advances of scheduled commercial banks reached ₹175 lakh crore in March 2024.

The Capital to Risk (Weighted) Assets Ratio (CRAR) for PSBs improved by 393 basis points, climbing to 15.43% in September 2024 from 11.45% in March 2015.

Over the past three years, PSBs have distributed a total dividend amounting to ₹61,964 crore, as noted by the ministry.

The ministry stated, “PSBs are expanding their reach across the country to enhance Financial Inclusion. Their capital foundation has become more robust, and their asset quality has seen improvement. Now, they can access capital markets instead of solely relying on government recapitalization.”

The number of bank branches has increased from 1,17,990 in March 2014 to 1,60,501 in September 2024, with 1,00,686 branches located in rural and semi-urban areas.

As of September 2024, the total number of operational KCC accounts stood at 7.71 crore with an outstanding total of ₹9.88 lakh crore.

During the last three years, advances to MSMEs have shown a compound annual growth rate (CAGR) of 15%. By March 31, 2024, total MSME advances reached ₹28.04 lakh crore, marking an annual growth of 17.2%.

The gross advances of Scheduled Commercial Banks grew from ₹8.5 lakh crore to ₹61 lakh crore between 2004 and 2014, and have significantly risen to ₹175 lakh crore in March 2024, as mentioned by the ministry.

To promote financial inclusion, over 54 crore Jan Dhan accounts and more than 52 crore collateral-free loans under various key financial inclusion initiatives (PM Mudra, Stand-Up India, PM-SVANidhi, PM Vishwakarma) have been approved.

Under the Mudra scheme, 68% of beneficiaries are women, while in the PM-SVANidhi scheme, 44% of beneficiaries are women.

The RBI initiated an asset quality review (AQR) in 2015 to identify and mitigate stress in the banking system. This included a transparent recognition process for banks and the reclassification of stressed accounts as NPAs.

Since 2015, the government has adopted a comprehensive 4R strategy focusing on Recognizing NPAs transparently, Resolution and Recovery, Recapitalizing PSBs, and implementing Reforms in the financial system to tackle the challenges faced by PSBs.