Bank recapitalisation along with NPA resolution has started bearing fruits as can be seen in form of the double-digit growth in bank credit in April, the government said on Tuesday. The banks are also getting benefitted by bad loan resolution program through NCLT, he added. “BankRecap in Oct 17 showing results. Bank credit 10.4% in April ’18 up from 5.9% in Oct ‘17; supporting GDP growth in March 18 at 7.7%. NPA resolution through NCLT and write back helping banks,” Financial Services Secretary Rajiv Kumar tweeted.
Gross bank credit grew at 10.4 percent in April, the highest since demonetisation and the implementation of Goods and Services Tax (GST), IANS reported citing RBI data. The fourth quarter GDP growth for 2017-18 grew at 7.7 percent.
Bank recap package
In 2017, government announced a Rs 2.11 lakh crore recapitalsiation program for debt-stressed public sector banks. In a bid to clean banks’ books and revive investment in a slowing economy, the union cabinet in October last year approved an unprecedented Rs 2.11 lakh crore for recapitalisation of banks over the next two years. Finance Secretary Rajiv Kumar had laid down 6-point reforms for the PSBs and said their performance will be under the annual assessment. Of the 21 PSBs. IDBI was allocated the highest capital of Rs 10,610 crore from the government.
Meanwhile, topped by scam-tainted Punjab National Bank which took a hit of nearly Rs 12,283 crore, losses of public sector banks crossed a whopping Rs 87,300 crore in 2017-18 fiscal. Of the 21 state-owned banks, only two banks, Indian Bank and Vijaya Bank, posted profits during 2017-18.
Indian Bank posted the highest profit of Rs 1,258.99 crore and Vijaya Bank’s profit was Rs 727.02 crore in the fiscal. In 2017-18, the net loss posted by state-owned banks was about Rs 85,370 crore compared to a net profit of Rs 473.72 crore in the last fiscal.