Prime Minister Narendra Modi has praised the "remarkable" turnaround in the health of India’s banking sector after net profit crossed Rs 3 lakh crore for the first time in FY24.
As reported by Moneycontrol on May 20, private sector banks reported a net profit of Rs 1.78 lakh crore and the state-owned lenders Rs 1.41 lakh crore in the previous financial year.
In absolute terms, the private sector banks reported a bigger net profit than PSBs. In FY24, a total of 26 private sector banks reported a net profit of Rs 1.78 lakh crore versus the 12 PSBs’ net profit of Rs 1.41 lakh crore.
“When we came to power, our banks were reeling with losses and high NPAs due to the phone-banking policy of UPA. The doors of the banks were closed for the poor,” PM Modi said in a post on the X platform on May 20.
In a remarkable turnaround in the last 10 years, India's banking sector net profit crosses Rs 3 lakh crore for the first time ever.When we came to power, our banks were reeling with losses and high NPAs due to the phone-banking policy of UPA. The doors of the banks were closed…
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— Narendra Modi (@narendramodi) May 20, 2024
Modi added that the improvement in banks’ health would boost the availability of credit to the poor, micro, small and medium enterprises and farmers.
According to experts, the increase in profit is largely due to the banks maintaining high credit growth, resulting in an increase in net interest income. The lenders also kept their asset quality under control, reporting a healthy bad loan book in FY24.
Also read: Indian banking system strong, sustainable, says PM Modi
Previously, Modi had said the Indian banking system, which once ran losses, is now in profit and credit has seen record growth.
“India’s banking system is strong and sustainable globally. The banking system which was once in loss is now in profit and credit has seen record growth,” Modi had said at an event in Mumbai on April 1, commemorating 90 years of the Reserve Bank of India (RBI).
The government had infused Rs 3.5 lakh crore to capitalise and improve the condition of public sector banks (PBS). “Gross NPAs of banks came down from 11.25 percent in 2018 to 3 percent in September 2023 and credit growth of banks is nearly at 15 percent,” Modi said, referring to non-performing assets.
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