Prime Minister Narendra Modi applauded the remarkable turnaround in India’s banking sector, highlighting the crossing of the Rs 3 lakh crore net profit milestone in FY24. Private sector banks recorded a net profit of Rs 1.78 lakh crore, outstripping state-owned lenders who reported Rs 1.41 lakh crore.
Attributing the success to prudent policies, PM Modi underscored the adverse impact of the phone-banking policy during the previous government’s tenure, which led to losses and high NPAs. However, under the current administration, banks have witnessed notable improvements, opening doors for enhanced credit accessibility to marginalized sections, including the poor, MSMEs, and farmers.
Experts believe that the surge in profits was primarily possible due to banks’ sustained high credit growth, leading to a rise in net interest income. Additionally, the lenders effectively managed their asset quality, maintaining a healthy bad loan book throughout the fiscal year 2023-24.
During an event in Mumbai commemorating 90 years of the Reserve Bank of India (RBI) on April 1, the Prime Minister emphasized the robustness and global sustainability of India’s banking system. He noted the significant turnaround, highlighting that banks, once incurring losses, are now profitable, with credit witnessing unprecedented growth.
He further highlighted the government’s infusion of Rs 3.5 lakh crore to revitalize public sector banks (PSBs), which has played a pivotal role in improving their condition. He
pointed out a substantial decline in gross NPAs from 11.25 percent in 2018 to 3 percent by September 2023, indicating a positive trend in asset quality management. Additionally, PM Modi cited a noteworthy credit growth rate of nearly 15 percent, underscoring the sector’s resilience and potential for sustained expansion.
