Lok Sabha Question No. 5200 (UNSTARRED), answered on 2022-04-04
Subject: Performance of PSBs
Ministry: FINANCE
Asked by: Khagen Murmu

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

## LOK SABHA UNSTARRED QUESTION NO. †5200

To be answered on the 4 th  April 2022/Chaitra 14, 1944 (Saka)

Performance of PSBs

†5200 . SHRI KHAGEN MURMU:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Public Sector Banks (PSBs) lag behind their private sector counterparts in most metrics; and
- (b) if so, the details thereof along with the corrective steps taken/proposed to be taken by the Government keeping in view the fact that the pandemic has left deep scars on India's banking system?

## ANSWER

## THE MINISTER OF STATE FOR FINANCE (DR. BHAGWAT KARAD)

- (a): The legislative paradigms for the Public Sector Banks (PSBs) and private sector banks in the domestic banking industry are different. PSBs are committed by their governing Acts i.e. the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980 and the State Bank of India Act, 1955, to serve economic development in conformity with national policy and objectives, expand banking facilities on large scale particularly in underserved areas, and fulfil other public purposes.

Details of important metrics, for first 9 months of FY 2021-22, of Public Sector Banks (PSBs) and Private Sector Banks (PVBs) are as under:

| Metric                                                                                   | PSBs    | PVBs   |
|------------------------------------------------------------------------------------------|---------|--------|
| Capital to Risk (Weighted) Assets Ratio (CRAR) (Minimum regulatory requirement - 11.50%) | 14.34%  | 18.18% |
| Gross NPA                                                                                | 7.88%   | 4.33%  |
| Provision Coverage Ratio (PCR)                                                           | 85.73%  | 86.58% |
| Net Profit (in crore Rs.)                                                                | 48,874* | 65,460 |
| Return on Equity (RoE)                                                                   | 8.69%   | 11.25% |

(Source: RBI data)

(b):  Government  has  taken  comprehensive  measures  under  AatmaNirbhar  Bharat  Abhiyaan economic  package  and  RBI's  regulatory  package,  revival  framework  and  monetary  policy initiatives, which included, inter alia , the following:

- (i) Six  months  moratorium  on  loan  repayments  and  asset  classification  and  payment  of difference  between  compound  interest  and  simple  interest  (ex-gratia  payment)  for  six months moratorium (1.3.2020 to 31.8.2020) to borrowers in specified loan accounts;
- (ii) Resolution  Framework  for  personal  loans  and  loans  to  Micro,  Small  and  Medium Enterprises (MSMEs) and corporates, without downgrading the loan as NPA;
- (iii) Restructuring of loans to MSME, without assets classification downgrade;
- (iv) Emergency Credit Line Guarantee Scheme for providing additional working capital/ term loan requirement to COVID-19 impacted MSMEs/ business enterprises, extended up to March-2023 and Rs. 5 lakh crore, including additional increase of Rs. 50,000 crore provided to hospitality and related sectors;
- (v) Liquidity measures by RBI (Targeted Long-Term Repo Operations -1 & 2);
- (vi) Relief in filing of applications for initiation of Corporate Insolvency Resolution Process under Insolvency and Bankruptcy Code, till Mar-21; and
- (vii) Special Window for Completion of Affordable and Mid-Income Housing (SWAMIH) fund for providing funding for the completion of stressed projects under affordable and middleincome housing category.

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