Total Net Loss Of Public Sector Banks Topped Rs 87,000 Crore In FY18
The cumulative loss of public sector banks crossed Rs 87,357 crore in 2017-18, with scam-tainted Punjab National Bank Ltd. topping the chart with a hit of nearly Rs 12,283 crore, followed by IDBI Bank Ltd.
Of the 21 state-owned banks, only two—Indian Bank Ltd. and Vijaya Bank Ltd.—reported profits in 2017-18. Indian Bank posted the highest profit of Rs 1,258.99 crore and Vijaya Bank’s profit worked out to be Rs 727.02 crore.
The remaining 19 government-run banks collectively suffered a net loss of Rs 87,357 crore during the financial year, according to the latest quarterly numbers reported by these lenders. All the 21 banks had together reported a net profit of Rs 473.72 crore in 2016-17.
PNB, which is reeling under over Rs 14,000-crore scam allegedly perpetrated by jeweller Nirav Modi and associates, suffered a net loss of Rs 12,282.82 crore in the last financial year. In 2016-17, the Delhi-based bank had posted a profit of Rs 1,324.8 crore.
PNB was followed by IDBI Bank Ltd., whose net loss widened to Rs 8,237.93 crore in the financial year ended March 2018 from Rs 5,158.14 crore in the previous year.
India’s largest lender State Bank of India Ltd. too added hugely to the combined losses of public sector banks. SBI’s net loss in 2017-18 stood at Rs 6,547.45 crore against a net profit of Rs 10,484.1 crore in 2016-17.
The Indian banking sector is grappling with mounting non-performing assets and a host of scams and frauds.
The NPA in the banking sector stood at Rs 8.31 lakh crore as of December 2017. Weak financials due to mounting bad loans have already pushed 11 banks, of the 21 state-owned banks, under the prompt corrective action framework of the Reserve Bank of India.
The recent tight prudential norms released by the RBI on Feb.12 have added to the NPA woes.
Interim Finance Minister Piyush Goyal has announced setting up of a committee to give recommendations in two weeks on formation of an asset reconstruction company for faster resolution of stressed accounts.
The committee under Sunil Mehta, non-executive chairman of PNB, will make recommendations in two weeks on setting up of an asset reconstruction company or asset management company for faster resolution of stressed accounts.