Public Sector Banks Incur Net Losses Of 87,000 Crores In FY2018

Punjab-National-Bank

Public sector banks saw losses of Rs 87,300 crore in 2017-18 fiscal, topped by scam-tainted Punjab National Bank which took a hit of nearly Rs 12,283 crore. Out of 21 state-owned banks, only two  Indian Bank and Vijaya Bank  posted profits during 2017-18. Indian Bank posted highest profit of Rs 1,258.99 crore and the Vijaya Bank’s profit worked out to be Rs 727.02 crore. The rest 19 government-run banks collectively posted a net loss of Rs 87,357 crore during the fiscal, as per the latest quarterly numbers posted by these lenders. All 21 banks had together posted a net profit of Rs 473.72 crore in the 2016-17 fiscal. Punjab National Bank, which is reeling under over Rs 14,000-crore scam allegedly perpetrated by Nirav Modi and associates, posted a net loss of Rs 12,282.82 crore last fiscal. In 2016-17, the Delhi-headquartered bank had posted a profit of Rs 1,324.8 crore.PNB was followed by IDBI Bank, whose net loss widened to Rs 8,237.93 crore in the fiscal ended March 2018 from Rs 5,158.14 crore in the previous year.

India’s largest bank State Bank of India too added hugely to the combined losses of PSBs. SBI’s net loss in 2017-18 stood at Rs 6,547.45 crore as against a net profit of Rs 10,484.1 crore in 2016-17. The NPA in the banking sector stood at Rs 8.31 lakh crore as of December 2017. Interim Finance Minister Piyush Goyal has announced setting up of a committee to give recommendations in two weeks on formation of an Asset Reconstruction Company for faster resolution of stressed accounts. The committee under Sunil Mehta, non-executive chairman of PNB, will make recommendations in two weeks on setting up of an Asset Reconstruction Company or Asset Management Company for faster resolution of stressed accounts. The finance minister said the committee will consider whether such an arrangement will be good for the banking system and, if any such suggestion is advisable, it will also consider the modalities by which such an ARC and/or and AMC should be set up.