New Delhi: The worst was over for state-run banks, with improvements in recovery, operating profits and bad debt ratio compared with the previous quarter, the finance ministry said on Thursday.
“Resurgent PSBs (public sector banks) — Nation’s growth engines, after cleaning put worst behind,” Department of Financial Services Secretary Rajiv Kumar wrote on micro-blogging site Twitter.
State-run banks put together made a total recovery of Rs 36,551 crore in the first quarter of 2018-19, nearly half of the entire 2017-18. Further, on a quarter-on-quarter basis, operating profits of banks rose 11.5% and losses fell 73.5%, Kumar wrote.
Nineteen of the 21 banks had reported losses in the last quarter of 2017-18. In the fourth quarter, total losses of state-run banks amounted to Rs 62,682 crore, which came down to Rs 16,617 crore in the first quarter of 2018-19. Operating profits also increased to Rs 36,632 crore at the end of the June quarter, compared with Rs 34,329 crore in the previous quarter.
Asset quality issues had also been addressed through falling NPA slippages and improvement in the provision coverage ratio by 2.2 percentage points to 63.8%, Kumar said. Recoveries under the Insolvency and Bankruptcy code also aided banks, he added.
With strengthening balance sheets of state-run banks, the government said banks will step up focus on responsive banking with the motto, customer first.
The focus will be to promote digital banking services such as Internet and mobile banking.