RBI will keep low inflation in mind while deciding rates: FM

Bilkulonline.com, New Delhi, Sep 16: Indian state-run banks have collectively made an operating profit of almost Rs 35,000 crore this fiscal, but the massive provisioning for bad debts has pared their net profit down to Rs 222 crore, Finance Minister Arun Jaitley said on Friday, adding they had finally turned the corner and reported a cumulative net profit.

During the one day meeting, Jaitley will review the overall performance of PSBs in the current financial year (FY 2017) and last quarter in particular.

Union Finance Minister Arun Jaitley will hold a quaterly review meeting with the chief executive officers (CEOs) and managing directors (MDs) of public sector banks (PSBs) and financial institutions (FIs) here tomorrow.

Gross NPAs of the PSBs have surged from 5.43 per cent (Rs 2.67 lakh crore) in 2014-15 to 9.32 per cent (Rs 4.76 lakh crore) in 2015-16 of the total advances.

“Therefore with these effective steps, the banks will now have to take the intivative…the NPA situation is certainly not either static or permanent”, he said.

“Various suggestions have come up for empowering the banks, functioning in an environment, so that they can deal with the situation”.

Aimed to help the cash strapped banks in August government announced infusion of ‘22,915 crore capital in 13 lenders including SBI and Indian Overseas Bank to revive loan growth that has hit a two-decade low.

“The issues relating to financial inclusion and literacy as well as non performing assets, or banks’ bad loans, are also likely to be discussed at the meeting”, it added.

“In case of few accounts, this issue has arisen and there are names of four banks”. Jaitley had earlier said that the government stands “solidly” behind the banks.

Pradhan Mantri Jan Dhan Yojana also aims to provide financial services, deposit accounts, remittances and overdraft facility.

Banks should also keep in their mind the larger interest of the economy while selling assets, he said, adding that asset sale should not stop or paralyse the running establishments because that may itself lead to waste of the investment and also result in job losses.