PSU banks suffer whopping Rs. 87,000cr loss in FY18
(Sourced from PTI)
Losses of 19 government-run banks crossed a whopping Rs. 87,357cr in FY2017-18, topped by scam-tainted Punjab National Bank which took a hit of nearly Rs. 12,283cr. Of 21 state-owned banks, only two banks posted profits: Indian Bank (Rs. 1,258.99cr) and Vijaya Bank (727.02cr). The net loss posted by banks was about Rs. 85,370cr as against a net profit of Rs. 473.72cr in FY2016-17.
Punjab National Bank, which is reeling under more than Rs, 14,000cr scam allegedly perpetrated by Nirav Modi and associates, posted a net loss of Rs. 12,282.82cr last fiscal. In 2016-17, the Delhi-headquartered bank had posted a profit of Rs. 1,324.8cr. Second came IDBI Bank, whose net loss widened to Rs. 8,237.93cr in the financial year 2017-18 from Rs. 5,158.14cr in the previous year.
India's largest bank State Bank of India too added hugely to the combined losses of PSBs. SBI's net loss in FY18 stood at Rs. 6,547.45cr as against a net profit of Rs. 10,484.1cr in 2016-17. Indian banking sector is grappling with mounting non-performing assets (NPAs) and a host of scams/frauds. The NPAs in 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, out of 21 state-owned banks, under the Prompt Corrective Action (PCA) framework of the Reserve Bank. The tight prudential norms released by the RBI on February 12 have added to the NPA woes.
Interim Finance Minister Piyush Goyal announced setting up of a committee to give recommendations in two weeks on the formation of an Asset Reconstruction Company for faster resolution of stressed accounts. The committee, headed by Sunil Mehta, non-executive chairman of PNB, will consider whether such an arrangement will be good for the banking system and if any such suggestion is advisable.