The turnaround in the financial performance of the public sector banks, pursuant to the banking sector reforms, has resulted in the market valuation of government holdings in these banks far exceeding the initial recapitalisation cost?which is something unique to the Indian banking system.

Thus, the recapitalisation of banks by the government has not been merely a ?holding out? operation by the majority owner of the banks, said V Leeladhar, deputy governor, Reserve Bank of India adding that the public sector banks as March 2008, accounted for 69.9 % of the aggregate assets and 72.7% of the aggregate advances of the banking system.

Leeladhar was speaking on the occasion of the birth-centenary celebrations of M Ct M Chettyar, the founder of the Indian Overseas Bank, on August 2at Chennai

The average capital adequacy ratio for the scheduled commercial banks, which was around 2% in 1997, had increased to 13.08% as on March 31, 2008. As far as asset quality goes, the gross NPAs of the scheduled commercial banks, which were as high as 15.7 % at end-March 1997, declined significantly to 2.4 % as at end-March 2008. The net NPAs of these banks during the same period declined from 8.1 % to 1.08 %

The reform measures have also resulted in an improvement in the profitability of banks. The Return on Assets (RoA) of scheduled commercial banks increased from 0.4 % 1991-92 to 0.99 per cent in 2007-08.

The Indian banks would appear well placed in this regard too vis-?-vis the broad range of RoA for the international banks, said Leeladhar.

The Business per Employee (BPE), as a measure of productivity, for the public sector banks has registered considerable improvement. The BPE for the public sector banks, which was Rs. 95 lakh in 1998-99, almost doubled to Rs. 188 lakh in 2002 and more than re-doubled to Rs. 496 lakh in 2007.

According to Leeladhar as at end-June 2008, the number of ATMs in the country stood at 36,314 of which the number of ATMs deployed by the PSBs, new-private-sector, old-private-sector and foreign banks was 22,525, 10,552, 2,189 and 1048 ATMs, respectively. At the system level, the banks had planned the installation of another 10,560 ATMs during 2008-09.

During the quarter ended June 2008, the daily average number of hits on the ATMs of the PSBs aggregated 31,31,431, with the daily average amount of transactions at Rs. 759.81 crore as against the corresponding figure of 14,91,399 and over Rs. 385 crore for the (old and new) private sector banks, of which the new private sector banks accounted for a loin?s share at 12,84, 071 hits and around Rs. 329 crore in the value of daily transactions.

The number of credit cards outstanding in the banking industry at the end of June 2008 was 27.02 million as against 24.39 million in June 2007.