Gross NPA at PSU Banks: According to information provided to Parliament on Monday, the government has implemented a number of reforms that have greatly improved the asset quality of public sector banks, with the gross non-performing assets ratio falling from a peak of 14.6% in March 2018 to 5.53% in December 2022. In a written response to the Lok Sabha, Minister of State for Finance Bhagwat K Karad stated that all PSBs are profitable, with an overall profit of Rs 66,543 crore in 2021–22 and Rs 70,167 crore in the first nine months of the current financial year.
According to him, resilience has strengthened at the same time as the provision coverage ratio of PSBs climbed from 46% to 89.9% in December 2022. He also noted that the capital adequacy ratio of PSBs greatly increased from 11.5 % in March 2015 to 14.5 % in December 2022.
According to him, the total market capitalization of PSBs climbed from Rs 4.52 lakh crore in March 2018 to Rs 10.63 lakh crore in December 2022 (excluding IDBI Bank, which was classified as a private sector bank in January 2019).
Karad also said banks, earlier placed under Prompt Corrective Action (PCA) framework by RBI, have made significant improvement. Talking about various measures taken to improve the financial health of PSBs, Karad said, the government implemented a comprehensive 4R strategy of Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem.
Major banking reforms undertaken by the government over the last eight years addressed credit discipline, responsible lending and improved governance, besides adoption of technology, amalgamation of banks, and maintaining general confidence of bankers, he said. In reply to another question, Karad said, as per the information provided by Ministry of Road Transport & Highways (MoRTH), the total estimated vehicle fleet is 30.48 crore (excluding data from Madhya Pradesh, Andhra Pradesh and Lakshadweep), of which 16.54 crore vehicles are uninsured.
Replying to another question, Karad said the government since 2016 has given ‘in-principle’ approval for strategic disinvestment of 36 cases of public sector enterprises (PSEs) and/or subsidiaries/ units/ joint ventures of PSEs/ banks. Of the 36 cases, 33 are being handled by Department of Investment and Public Asset Management (DIPAM) and 3 cases are being handled by the respective Administrative Ministry/Department, he said.
“Out of the 33 cases being handled by DIPAM, strategic disinvestment transactions have been completed in 10 cases; 5 PSEs are under consideration for closure; 1 case is held up due to litigation, 1 case is under Corporate Insolvency Resolution Process (CIRP) in NCLT and 2 transactions are under review for feasibility,” he said, adding, remaining 14 transactions are at various stages. In other PSEs, where the government continues to retain control, disinvestment through minority stake sale is carried out through various SEBI-approved methods such as initial public offer (IPO), offer for sale (OFS), buyback of shares etc. from time to time based on prevailing market conditions and investor interest, he said. The modernisation and capacity expansion of PSEs are taken up by the respective boards of PSEs under the administrative control of different ministries, he added.