President Murmu says reforms made PSU banks profitable; SBI at record profit, LIC more robust now

President Droupadi Murmu said SBI is at a record profit, and LIC is more robust.

President of India Droupadi Murmu said on Thursday, 27 June that the reforms carried out by the government over the last 10 years have made PSU banks robust, profitable, and capable of driving the nation’s economic growth. A lot of reforms have been carried out in the last 10 years that are benefitting the nation today, said President Murmu in an address to the joint Parliament session.

She noted that SBI (India’s largest bank State Bank of India) is at a record level of profit now, and that LIC (Life Insurance Corp of India) is far more robust. “Our public sector banks are now robust and profitable,” said President Murmu, adding that the PSU banks’ profits in the financial year 2023-24 rose 35 percent from the previous year.

Two years ago, the government implemented banking reforms to save the banking sector. Now, these reforms have put India’s banking sector among the strongest in the world, she said. She cited the implementation of laws such as IBC (Insolvency and Bankruptcy Code). PSU banks’ NPAs are also falling, she said.

In Q4FY24, State Bank of India (SBI), the country’s largest lender, reported 24 percent rise in net profit at Rs 20,698 crore for the quarter ended March 31, 2024, aided by strong loan demand. SBI reported net profit of Rs 16,695 crore in the year-ago period.

Similarly, Life Insurance Corporation of India reported a 2.5 percent year-on-year rise in net profit at Rs 13,762 crore for the March quarter of the financial year 2023-24, from Rs 13,421 crore in the year-ago period.

The country’s largest insurer’s asset quality improved in the final quarter of FY24, the company said on May 27. The insurer announced an interim dividend of Rs 6 per share.

Its gross non-performing asset (GNPA) stood at 2.01 percent against 2.56 percent in the year-ago period.

In the January-March quarter of the financial year 2023-24, banks reported robust credit growth, keeping up a 15-25 percent momentum.

Public sector banks fared well in terms of credit growth compared to growth in deposits. Bank of Baroda reported a credit growth of 12.41 percent compared to a deposit growth of 10.24 percent, while for Punjab National Bank, the credit and deposit growth numbers stood at 11.5 percent and 7 percent on an annualised basis.

Private lender YES Bank reported a credit growth of 14.1 percent and HDFC Bank’s sequential numbers showed a rise of 1.6 percent.

On June 11, Moneycontrol reported that  banking industry expects the Prime Minister Narendra Modi-led National Democratic Alliance’s (NDA) third tenure to focus on financial inclusion and insurance penetration, among other reforms.

A stable central government can lead to a more focused and continuous approach towards policy making, they said.

Also, more focus on financial inclusion through bank accounts for all and insurance penetration under the Insurance Regulatory and Development Authority of India’s (IRDAI) insurance for all by 2047 could be the focal points for the new government, experts said.