Lok Sabha Question No. 250 (STARRED), answered on 2018-12-28
Subject: Decline in Profit of Banks
Ministry: FINANCE
Asked by: RAM TAHAL CHOUDHARY

## GOVERNMENT  OF INDIA MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL  SERVICES

## Decline in Profit  of Banks

## LOK SABHA STARRED QUESTION NO. *250 TO BE ANSWERED ON THE 28 TH  DECEMBER 2018/ PAUSHA  7, 1940  (SAKA)

## *250.   SHRI  RAM  TAHAL CHOUDHARY:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether   several   banks   have  reported   decline   in  profit   due  to  Non   Performing Assets (NPAs);
- (b) if so, the details  thereof;
- (c) the extent  of decline  in profit  of the nationalised  banks  due to NPAs,  bank-wise; and
- (d) the  number   of  officers  held  responsible   by   the  Government   in  this   regard   along with  the details  of the action taken against  them?

## ANSWER

## (SHRI ARUN  JAITLEY)

The Finance  Minister

- (a) to (d): A statement  is laid  on the Table  of the House.

***

## STATEMENT FOR LOK SABHA  STARRED QUESTION NO. *250 FOR 28 TH DECEMBER 2018  REGARDING  'DECLINE IN PROFIT OF BANKS' BY SHRI RAM TAHAL CHOUDHARY,  MEMBER OF PARLIAMENT

(a)  to  (d):  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. Nationalised Banks  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 the fourth  quarter  of the financial  year  (FY) 2017-18, all such schemes for restructuring stressed loans were  withdrawn.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  Nationalised  banks posted  aggregate operating   profits   during   the  last  Half   Year   (H1  FY19)  (1.4.2018   to 30.9.2018)  of Rs. 47,221 crores,  as compared  to Rs 49,466 crore  for the same period  last year   (H1  FY18)  their   net  profits   declined   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.  Nationalised  Banks made aggregate  provision for NPAs and other  contingencies  of Rs. 57,015 crore  during  H1 FY19. Additionally, because of hardening  of bond yields,  these banks  had aggregate mark-to-market losses on their   investment   portfolios   of  Rs.10,400   crore   during   the  same  period.   Details   of profit  and loss of the nationalised  banks  during  the last H1 FY19 are at Annex.

As per the inputs  received  from  Nationalised  Banks,  in FY 2017-18, 6,049 officers have been held responsible  on account  of staff delinquency in NPA  accounts  and depending on the gravity  of the lapses, Minor  Penalty/  Major  Penalty  have been imposed  against erring   officials   including, inter-alia Dismissal/   Removal   from  Services/  Compulsory Retirement  from Services,  Reduction  to lower  grade,  Reduction  to lower  stage in time scale  of  pay   etc.  In  all   the  cases,  depending   on  the  amount   involved,   CBI/  Police complaints  have been lodged.

## Annex

Lok Sabha Starred Question No. *250, for 28.12.2018, regarding "Decline in Profit of Banks"

## Details of profit and loss of Public Sector Banks

Amount in crore Rs.

|                           | Operating Profit   | Operating Profit   | Prov. For NPA     | Prov. For NPA     | Net Profit        | Net Profit        |
|---------------------------|--------------------|--------------------|-------------------|-------------------|-------------------|-------------------|
|                           | HY ending Sep '17  | HY ending Sep '18  | HY ending Sep '17 | HY ending Sep '18 | HY ending Sep '17 | HY ending Sep '18 |
| Allahabad bank            | 2,393              | 1,364              | 3,156             | 4,582             | 99                | -3,767            |
| Andhra Bank               | 2,670              | 2,512              | 2,795             | 2,543             | -345              | -974              |
| Bank of Baroda            | 5,690              | 6,088              | 3,919             | 4,233             | 826               | 954               |
| Bank of India             | 4,612              | 3,516              | 4,023             | 5,087             | 267               | -1,061            |
| Bank of Maharashtra       | 1,225              | 1,265              | 1,993             | 2,452             | -435              | -1,092            |
| Canara Bank               | 4,952              | 5,260              | 4,220             | 4,869             | 512               | 581               |
| Central Bank of India     | 1,320              | 892                | 2,820             | 879               | -1,327            | -2,446            |
| Corporation Bank          | 2,079              | 2,430              | 4,046             | 2,237             | -975              | 188               |
| Dena Bank                 | 686                | 702                | 783               | 787               | -318              | -1,138            |
| Indian Bank               | 2,628              | 2,489              | 1,315             | -719              | 824               | 359               |
| Indian Overseas Bank      | 1,815              | 2,436              | 3,864             | 3,938             | -1,722            | -1,407            |
| Oriental Bank of Commerce | 2,560              | 1,697              | 4,738             | 2,055             | -2,236            | -291              |
| Punjab National Bank      | 664                | 759                | 537               | 1,196             | 39                | -507              |
| Punjab & Sind Bank        | 6,496              | 7,034              | 5,206             | 9,686             | 904               | -5,472            |
| Syndicate Bank            | 2,154              | 1,129              | 2,120             | 3,397             | -158              | -2,824            |
| UCO Bank                  | 853                | 1,688              | 2,528             | 3,449             | -1,286            | -1,770            |
| Union Bank of India       | 4,472              | 3,861              | 6,202             | 3,513             | -1,414            | 269               |
| United Bank               | 710                | 489                | 1,067             | 1,795             | -556              | -1,272            |
| Vijaya Bank               | 1,487              | 1,611              | 861               | 1,036             | 440               | 284               |
| All Nationalised Banks    | 49,466             | 47,221             | 56,193            | 57,015            | -6,861            | -21,388           |

Source: RBI