Posting a hyperlink of a TOI story on X, Modi stated that the banking sector has achieved a ‘outstanding turnaround within the final 10 years’ with their internet revenue crossing Rs 3 lakh crore in FY24.
“When we came to power, our banks were reeling with losses and high NPAs due to the phone-banking policy of UPA. The doors of the banks were closed for the poor,” Modi stated. “This improvement in the health of banks will help improve credit availability to our poor, farmers and MSMEs,” he added.
Modi’s feedback on X had been in response to a TOI report in regards to the banking sector attaining this milestone revenue in FY24. Public sector banks have generated a report Rs 1.4 lakh crore of internet revenue in FY24 , a rise of 34% over Rs 1.05 lakh crore within the previous yr.
Private sector banks have grown a lot quicker, growing their internet revenue by 42% to Rs 1.7 lakh crore in contrast to Rs 1.2 lakh crore a yr in the past.
Banks have been combating provisions for unhealthy loans for nearly a decade, with public-sector banks bearing the brunt of the burden. Provisioning peaked in FY18 when PSBs posted a internet lack of Rs 85,390 crore. This was adopted by losses of Rs 66,636 crore in FY19 and Rs 25,941 crore in FY20. Between FY16 and FY20, PSBs reported a collective lack of Rs 2 lakh crore. They rotated in FY22 with a internet revenue of Rs 85,390 crore.
To cowl the losses, govt infused Rs 3.1 lakh crore of capital over 5 years between FY17 and FY21. However, solely Rs 34,997 crore was by way of Budget allocation. The remaining Rs 2.8 lakh crore got here from recapitalisation bonds.
PSU banks fell into the purple after they had been pressured to recognise massive venture loans as defaults. In 2017, RBI recognized 12 defaulters for initiating insolvency proceedings. The defaulters had been referred to because the ‘soiled dozen’ whose complete unhealthy loans amounted to practically Rs 3.5 lakh crore.
After recapitalisation, the turnaround was supported by a string of high-profile resolutions the place massive companies corresponding to Essar and Bhushan Steel, Binani Cement. Lanco Industries, Alok Industries, Electrosteel had been taken over by massive corporates together with Tata, Birla, Reliance and Vedanta. Govt and RBI labored collectively to restore the well being of banks and restore confidence within the banking system and specialists have attributed the turnout to these sustained efforts from authorities.
The PM has repeatedly blamed the unhealthy mortgage downside with banks on what he termed “phone banking”.
