In the financial year ending March 2024, India’s public sector banks (PSBs) witnessed a remarkable turnaround as their cumulative profit crossed Rs 1.4 trillion, marking a staggering 35% growth over the previous year. State Bank of India (SBI), a market leader, contributed over 40% to this total, underlining its dominance in the sector.
Key Highlights:
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SBI reported a profit of Rs 61,077 crore, a significant 22% increase from the previous fiscal year.
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Several PSBs recorded impressive profit growth rates, with Punjab National Bank leading the pack with a remarkable 228% surge in net profit.
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Despite the overall positive trend, Punjab & Sind Bank reported a 55% decline in annual net profit, highlighting the varied performance within the sector.
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Bank of Baroda and Canara Bank emerged as top performers, reporting profits in excess of Rs 10,000 crore each.
Government Initiatives and Reforms:
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The success story of PSBs can be attributed to the strategic initiatives and reforms undertaken by the government, including the comprehensive 4R strategy: Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem.
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Over the last nine years, the government, led by Prime Minister Narendra Modi and supported by key figures like former finance minister Arun Jaitley and his successors, injected an unprecedented Rs 3,10,997 crore to recapitalise PSBs, providing crucial support and preventing defaults.
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These reforms focused on enhancing credit discipline, promoting responsible lending, improving governance, adopting technology, and facilitating bank mergers, all of which contributed to the sector’s resilience and growth.
Looking Ahead:
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The turnaround of PSBs from record losses in FY18 to record profits in FY24 underscores the potential of government interventions and industry reforms in revitalising the banking sector.
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As PSBs continue to strengthen their financial positions, there is optimism for sustained growth and stability, further bolstered by ongoing government support and strategic reforms.
