Lok Sabha Question No. 80 (STARRED), answered on 2018-12-14
Subject: Losses of Public Sector Banks
Ministry: FINANCE
Asked by: A. ARUNMOZHITHEVAN

## GOVERNMENT  OF INDIA

## LOK SABHA

## MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL  SERVICES

## STARRED QUESTION NO. *80 TO BE ANSWERED ON THE 14 TH  DECEMBER 2018/ AGRAHAYANA 23, 1940  (SAKA)

## Losses  of Public Sector Banks

## *80. SHRI A. ARUNMOZHITHEVAN:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether  the State owned  banks  saw their  cumulative  losses widen  nearly  three  and a half times  to Rs. 14, 716 crore  in the July-September quarter  of the current  fiscal due to mounting  bad loans;
- (b) if so, the details  thereof,  bank-wise;
- (c) whether   21  Public   Sector   Banks   had  posted  a  net  loss  of  Rs.  4,284  crore   in  the September  quarter  of 2017-18 and if so, the details  thereof;
- (d) whether   India's   second  largest   Public   Sector   Bank suffered  huge  losses after  the detection  of a massive  fraud  to the tune  of nearly  Rs. 14,000 crore;  and
- (e) if so, the details  thereof?

## ANSWER

## (SHRI ARUN  JAITLEY)

The Finance  Minister

(a) to (e): A Statement  is laid  on the Table  of the House.

***

## STATEMENT FOR LOK SABHA  STARRED QUESTION NO. *80 FOR 14 TH DECEMBER 2018 REGARDING  'LOSSES OF PUBLIC SECTOR BANKS' BY SHRI A. ARUNMOZHITHEVAN,  MEMBER OF PARLIAMENT.

- (a)  to  (c): Asset  Quality   Review   (AQR)   carried   out  in  2015  for  clean  and  fully provisioned   bank   balance-sheets   revealed   high   incidence   of  non-performing   assets (NPAs).  Expected losses on stressed loans,  not provided  for earlier  under  flexibility given to restructured  loans,  were  reclassified  as NPAs  and provided  for. Public  Sector  Banks (PSBs)  initiated   cleaning   up  by   recognising   NPAs   and  provided   for  expected   losses. Further,  during  the fourth  quarter  of the financial  year  (FY) 2017-18, all such schemes for restructuring stressed  loans  were   withdrawn. As  a  result,   while   PSBs  posted  operating profits  in the second quarter  of the current  and preceding  financial  years  of Rs. 36,757 crore  and Rs. 48,177 crore  respectively  in the aggregate,  many  had net losses primarily on account  of continuing  ageing  provision  for NPAs  recognised  as a result  of AQR  initiated in 2015 and subsequent  transparent  recognition  by  banks  including  under RBI's Revised Resolution   framework   for  Stressed  Assets  issued  on  12.2.2018.   PSBs  made  aggregate provision   for  NPAs   and  other   contingencies   of  Rs.  42,124  crore   and  Rs.  49,365  crore respectively  in the said two  quarters.  Additionally, because of hardening  of bond yields,  in the second quarter  of the current  financial  year,  PSBs had mark-to-market losses on their investment  portfolios  of Rs. 9,350 crore  as against  aggregate  mark-to-market losses of Rs. 3,096  crore   in  the  second  quarter   of  the  previous   financial   year   by   many   PSBs,  with several  other  PSBs making  profits.  Bank-wise  details  of net profit  of Public  Sector  Banks (PSBs)  for  the  July-September quarter   of  the  current   financial   year   (2018-19)  and  the previous  financial  year  (2017-18) are at Annexure.
- (d) and (e): Punjab  National  Bank,  the second largest  PSB, posted an operating  profit  of Rs  7,034  crore   and  had  made  a  provision   of  Rs.  11,262  crore   on  account   of  ageing provisions  for NPAs  and other  contingencies  (primarily on account  of continuing  ageing provision  for NPAs  due to transparent  recognition  of stressed assets) and Rs. 1,245 for mark-to-market  losses, thus posting a net loss of Rs. 5,472 crore  for the half-year  ended September  2018.

Annexure-I Lok Sabha Starred  Question  No. *80  for  14.12.2018 regarding  'Losses  of Public Sector Banks'

## Details of operating  profit,  provisioning  and net profit

| Banks                    | Q2FY'2017-18      | Q2FY'2017-18   | Q2FY'2017-18                                             | Q2FY'2017-18   | Q2FY'2018-19      | Q2FY'2018-19    | Q2FY'2018-19                                             | Q2FY'2018-19   |
|--------------------------|-------------------|----------------|----------------------------------------------------------|----------------|-------------------|-----------------|----------------------------------------------------------|----------------|
|                          | Operati ng profit | MTM Provisions | Provisions forNPA& contingenci es (excl. MTM Provisions) | Net profit     | Operatin g profit | MTM Provision s | Provisions forNPA& contingenc ies (excl. MTM Provisions) | Net profit     |
| AllahabadBank            | 1,223             | 76             | 1,077                                                    | 70             | 534               | 418             | 1,939                                                    | -1,823         |
| Andhra Bank              | 1,295             | 89             | 1,591                                                    | -385           | 1,298             | 266             | 1,465                                                    | -434           |
| Bank ofBaroda            | 3,042             | 0              | 2,686                                                    | 355            | 3,082             | 261             | 2,395                                                    | 425            |
| Bank ofIndia             | 2,233             | 96             | 1,958                                                    | 179            | 1,647             | 165             | 2,638                                                    | -1,156         |
| Bank ofMaharashtra       | 692               | 13             | 702                                                      | -23            | 794               | 232             | 535                                                      | 27             |
| CanaraBank               | 2,480             | 259            | 1,961                                                    | 260            | 2,327             | 333             | 1,695                                                    | 300            |
| CentralBank of India     | 869               | 1,342          | 1,620                                                    | -750           | 509               | 675             | 758                                                      | -924           |
| Corporation Bank         | 1,163             | 117            | 2,081                                                    | -1,035         | 899               | 39              | 757                                                      | 103            |
| DenaBank                 | 397               | 35             | 547                                                      | -185           | 442               | 55              | 804                                                      | -417           |
| IDBI Bank Limited        | 2,803             | 107            | 2,894                                                    | -198           | 850               | 963             | 3,490                                                    | -3,602         |
| IndianBank               | 1,376             | 39             | 885                                                      | 452            | 1,191             | 326             | 715                                                      | 150            |
| IndianOverseas Bank      | 1,039             | 18             | 2,243                                                    | -1,223         | 1,304             | 243             | 1,548                                                    | -487           |
| OrientalBank of Commerce | 1,551             | 167            | 3,134                                                    | -1,750         | 972               | 272             | 598                                                      | 102            |
| PunjabNational Bank      | 3,279             | 84             | 2,634                                                    | 561            | 2,839             | 1,254           | 6,118                                                    | -4,532         |
| Punjaband Sind Bank      | 359               | 3              | 342                                                      | 14             | 351               | 133             | 327                                                      | -109           |
| SyndicateBank            | 1,174             | 250            | 819                                                      | 105            | 570               | 1,239           | 874                                                      | -1,543         |
| UCOBank                  | 244               | 113            | 754                                                      | -623           | 506               | 412             | 1,231                                                    | -1,136         |
| UnionBank                | 1,939             | 143            | 3,327                                                    | -1,531         | 1,772             | 196             | 1,437                                                    | 139            |
| UnitedBank of India      | 286               | 144            | 487                                                      | -345           | 206               | 597             | 492                                                      | -883           |
| VijayaBank               | 734               | 0              | 548                                                      | 185            | 759               | 22              | 597                                                      | 140            |
| StateBank ofIndia        | 19,999            | 0              | 18,418                                                   | 1,582          | 13,905            | 1,249           | 11,711                                                   | 945            |

## Annexure-II

## Lok Sabha Starred  Question  No. *80  for  14.12.2018 regarding  'Losses  of Public Sector Banks' Details of operating  profit,  provisioning  and net profit  for  Punjab National  Bank

| Banks         | Q2FY'2017-18     | Q2FY'2017-18   | Q2FY'2017-18                                        | Q2FY'2017-18   |
|---------------|------------------|----------------|-----------------------------------------------------|----------------|
|               | Operating profit | MTM Losses     | ProvisionsforNPA &contingencies (excl. MTM Losses ) | Net profit     |
| Q4FY'2017-18  | -447             | 625            | 12,325                                              | -13,417        |
| Q1 FY'2018-19 | 4,195            | 9              | 5,126                                               | -940           |
| Q2FY'2018-19  | 2,839            | 1,254          | 6,118                                               | -4,532         |