Finance Minister Nirmala Sitharaman expressed her appreciation for the state-run banks' remarkable profitability on Saturday. She emphasized that despite the collapse of several global banks, Indian banks have fared well due to the professionalism exhibited in their management. According to the union Finance Minister, the net profit of public sector banks has nearly tripled to Rs.1.04 lakh crore in fiscal year 2022-23. Sitharaman cited data from the credit rating agency Crisil and stated that the Non-Performing Assets (NPAs) of Indian banks are projected to reach a decade-low of 3.8% by the end of FY 2023-24.
She attributed the improved performance of public sector banks to the various initiatives undertaken by the Modi government since 2014. Notably, critical parameters such as return on assets, net interest margin, and provisioning coverage ratio have witnessed significant enhancements.
Sitharaman stressed the importance of incorporating robust corporate governance policies and urged banks to ensure prudent liquidity management. She also emphasized the adherence to regulatory norms and highlighted the significance of robust asset liability and risk management.
The Finance Minister delivered these remarks during the inauguration of Punjab & Sind Bank's new corporate office in New Delhi.
In addition, FM Nirmala Sitharaman commended the Indian government for successfully addressing the twin-balance sheet problem faced by banks and corporates. She highlighted that concerted efforts from the Modi government have transformed the issue into a twin-balance sheet advantage for the Indian economy.
The term "twin-balance sheet problem" refers to the simultaneous deterioration in the financial health of banks and corporates.
"As a result of the government's various initiatives, I'm delighted to announce that the twin-balance sheet problem, as observed by the Reserve Bank, has been replaced by a twin-balance sheet advantage that is benefiting the Indian economy," stated Sitharaman.
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