FinMin asks banks to explore fintech partnership and co-lending opportunities
In the performance review of PSBs recently concluded by the Ministry of Finance, sources said, lenders were told to focus on technology and data analytics to push their lending.
The ministry also urged officials of public sector lenders to strengthen IT security systems and cybersecurity to control fraud.
According to the sources, banks have been asked to sanction lending to productive sectors to speed up the recovery of the economy in the face of headwinds including the Russian-Ukrainian war.
According to the latest RBI data, PSO loan growth improved significantly to 7.8% in March 2022 from 3.6% a year ago. Some of the PSOs recorded growth of 26%.
Bank of Maharashtra (BoM) recorded a 26% increase in gross advances to Rs 1,35,240 crore at the end of March 2022. It was followed by State Bank of India and Union Bank of India with 10.27% and 9.66% growth, respectively.
BoM, headquartered in Pune, recorded deposit growth of 16.26% and mobilized Rs 2,02,294 crore at the end of March 2022. Union Bank of India was second with 11.99% growth in deposits (Rs 10.32 102 crore), while Indian Bank recorded a rise of 10% to Rs 5,84,661 crore.
The sources said banks have been told to speed up the resolution of non-performing assets (NPAs) and focus on recovering bad debts.
The meeting took stock of the asset quality and business growth plans of the banks, the sources said, adding that non-performing assets (NPA) of Rs 100 crore and recovery status were also discussed.
It should be noted that the meeting took place in a context where all PSOs posted a profit for the second consecutive year. They more than doubled their net profit to Rs 66,539 crore in FY22. The collective profit of 12 public banks together was Rs 31,820 crore in FY21.
However, there have been collective losses for five consecutive years from 2015-16 to 2019-20.
The highest amount of net loss was recorded in 2017-18 at Rs 85,370 crore, followed by Rs 66,636 crore in 2018-19; Rs 25,941 crore in 2019-20; Rs 17,993 crore in 2015-16 and Rs 11,389 crore in 2016-17.
To improve the financial health of PSBs, the government has implemented a comprehensive 4Rs strategy – transparent recognition of NPAs, resolution and value recovery of troubled accounts, recapitalization of PSBs, and reforms of PSBs and the financial ecosystem at the national level. broad sense – for responsible development and clean system.
Comprehensive measures have been taken as part of the 4Rs strategy to reduce PSB NPAs.
As part of the strategy, the government infused Rs 3,10,997 crore to recapitalize banks over the last five fiscal years – from 2016-17 to 2020-21, of which Rs 34,997 crore came from budget allocation and Rs 2, 76,000 crores through the issuance of recapitalization bonds to these banks.
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