New Delhi, Dec 10 (IANS) Public sector Banks (PSBs) have returned to profitability in 2019-20, posting an aggregate profit of Rs 3,221 crore in the first half ending September, Minister of State for Finance Anurag Singh Thakur said in the Parliament.
PSBs had posted huge losses in 2017-18 and 2018-19 financial years due to heavy provisioning for non-performing assets and other contingencies, according to the minister.
State-run lenders had posted aggregate operating profits during 2017-18 and 2018-19 of Rs 1,55,603 crore and Rs 1,53,871 crore respectively.
However, they made aggregate provisions for NPAs and other contingencies of Rs 2,40,973 crore and Rs 2,35,623 crore in FY2018 and FY2019, respectively, he said in a written reply in Lok Sabha on Monday. This resulted in aggregate net losses of Rs 85,370 crore and Rs 81,752 crore in 2017-18 and 2018-19 respectively.
“Further, PSBs have returned to profitability in the current fiscal, reporting an aggregate profit of Rs 3,221 crore in the aggregate profit of Rs 3,221 crore in the first half of the current fiscal,” Thakur said.
He said their aggregate gross advances increased to Rs 68.76 lakh crore as on 31 March 2014 from Rs 25.03 lakh crore as on March end 2008.As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown, the minister said.
He was responding to a question whether the losses into a question whether the losses in public and private sector banks have been caused by increasing frauds.The Asset Quality Review (AQR) initiated in 2015 by the RBI for clean and fully provisioned bank balance-sheets revealed high incidence of non-performing assets (NPAs), the minister said.
The RBI has issued various guidelines on safeguards on frauds, misappropriation, embezzlements and defalcation of funds for Urban Cooperative Banks (UCBs), he added.