Interim Finance Minister Piyush Goyal has said that many public sector banks (PSBs) will turn profitable by the end of the current fiscal (FY19), reports The Hindu Business Line (BL).
“All the 21 PSBs recorded operating profits at the end of FY18, but due to higher provisioning, all of them, barring Vijaya Bank, recorded net losses. At the end of September 2018, the PSBs together recorded an operating profit of ₹36,757 crore. Many are expected to be back in the black at the end of this fiscal,” he said after a review meeting with the heads of banks on Monday (28 January).
“The sum and substance of today's meeting is we are going to see a far more vibrant, proactive, profitable banking sector in the days to come. We would like them to look at ways to improve delivery of services to farmers. We would like them to be more proactive in encouraging retail businesses,” he added.
In the meeting, RBI’s governor said that a line of communication has also been opened between the central bank and the banks to sort out concerns. He also directed banks to make use of the ‘dispensation given by the RBI on restructuring MSME loans.’
On 1 January, RBI announced a conditional, one-time restructuring of existing debt of up to Rs 25 crore for Medium Small and Micro Enterprises (MSMEs) which have defaulted on repayments, but loans given to them are still classified as standard assets. This was one of the principal demands by the government to boost the economy.