
Finance minister Nirmala Sitaraman on Friday reviewed the preparedness of public sector banks (PSBs) to tackle any possible disruption due to the surge in covid-19 cases that has prompted several states to announce restrictions.
During the meeting with the heads of PSBs, Sitharaman assessed various steps taken by the banks in implementing pandemic-related measures initiated by the Centre and Reserve Bank of India (RBI).
Following the virtual review meeting, the finance minister also had a detailed discussion with Reserve Bank of India (RBI) Governor Shaktikanta Das on post-pandemic economic recovery and the readiness of PSBs to tackle any challenges posed by the ongoing wave of covid-19.
In an official statement, the finance ministry said that bankers have told the minister that the state-run banks are adequately capitalised and prepared for any stress scenarios in future.
"In their assessment of overall situation, bankers were confident that PSBs are adequately capitalised and banks are prepared for any stress scenarios in future," it said.
The review meeting was also attended by Union Minister of State for Finance Bhagwat Kisanrao Karad and Secretary, Department of Financial Services (DFS), Debasish Panda, along with senior officials of the DFS.
The minister noted that business outlook was progressively improving inspite of the headwinds from global development and Omicron spread. She underlined that contact intensive sectors may require more support to help them fight against the pandemic.
She said that credit demand is expected to pick up on account of growth in retail segments, improvement in overall macroeconomic prospects and improving financial health of borrowers.
Bankers pointed out that PSBs have observed an improvement in the repayment culture in the country. PSBs have performed well and, supported by various policy measures, provided the required impetus to the economy for coming out of shackles of pandemic-induced stress, the statement said.
During the meeting, it was noted that PSBs recorded a net profit of ₹31,820 crore in FY 2020-21, the highest in last five financial years. In the first half of the current fiscal (FY22), the net profit of the government-owned banks stood at ₹31,145 crore.
Further, in the last seven financial years, according to the government, PSBs have made a recovery of over ₹5.49 lakh crore. Their capital to risk-weighted assets ratio (CRAR) as on September 2021 was 14.4%, against the regulatory requirement is 11.5%.
In terms of credit disbursement, the review meeting highlighted that PSBs recorded a year-on-year credit growth of 11.3% in personal loans, 8.3% in agriculture loans and overall credit growth of 3.5%, as on September last year.
Under the credit outreach programme launched in October 2021, PSBs have sanctioned an aggregate loan amount of ₹61,268 crore.
PSB chiefs also shared their views on the banking business and suggested several steps to the minister for the overall growth of the business.