NEW DELHI: Government on Tuesday said that public sector banks are in good financial health, reporting significant improvement in balance sheets , high levels of profits and bad debt at lowest levels in several decades.“Further, public sector banks have recorded sustained credit growth across different sectors of the economy,” minister of state for finance Pankaj Chaudhary told Rajya Sabha. The state-run lenders reported cumulative profits of just under Rs 2 lakh crore during the last financial year, nearly three times the level of Rs 67,000 crore seen in 2021-22. Over the last five years, gross non-performing assets or the stock of bad debt has fallen from 7.3% of advances to 1.9%, government told Parliament.
While government had infused capital in these banks to help them tide over the massive pile of bad debt, some of which was not recognised in their books, steps such as the Insolvency & Bankruptcy Code also helped in the clean up drive. Besides, higher economic activity has helped accelerate credit flow across the economy, with steps such as the Emergency Credit Line Guarantee Scheme, first used after the Covid lockdown, helping insulate banks in times of crisis.Even after West Asia war, government has introduced ECLGS 5.0 to help businesses deal with liquidity mismatches to support credit flow of up to Rs 2,55,000 crore.In response to a question on Monday, the junior minister for finance had told the Lok Sabha that so far, guarantees have been issued for Rs 1.9 lakh crore with some of the sectors dominated by small businesses such as trading, food processing, textiles topping the list.While civil aviation is also eligible for benefits up to Rs 5,000 crore, so far, eight guarantees of Rs 163 crore have been issued.
