NEW DELHI: Financial services secretary Rajiv Kumar said the worst was over for public sector banks and expressed hope that the lenders that were facing the central bank’s Prompt Corrective Action (PCA) would come out of that this fiscal year.

“Banks have made a recovery of `36,551 crore during the first quarter, registering 49% growth over the last fiscal,” Kumar said. Various measures taken by the government, including the Insolvency and Bankruptcy Code, have yielded good results in terms of reining in bad loans and increasing recovery, he added.

At present, out of 21PSBs, at least eleven are under the Reserve Bank of India’s PCA framework, which places restrictions on their lending among other measures. Kumar said the resurgent PSBs would be growth engines and with the clean-up of their balance sheet, the worst was behind.

“Operating profit has risen by 11.5% while losses fell 73.5% on a quarter-onquarter basis,” he said, adding asset quality had been addressed through reducing NPA slippage. The provision coverage ratio of banks has reached a healthy level of 63.8%, he added. The financial services secretary said with all these efforts, he was sure of the banks would come out of PCA this fiscal year.

“The resolve of the government is extremely clear that every stakeholder has to be responsible,” he said, adding that those who were not prudently behaving would have to face the consequences.


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