In a post on X, Sitharaman said India’s banking sector turned around due to Prime Minister Narendra Modi’s strong and decisive leadership, and recently achieved a significant milestone by recording its highest-ever net profit of over ₹3 lakh crore.
“During FY 2023-24, public sector banks recorded the highest-ever aggregate net profit of ₹1.41 lakh crore, almost 4 times higher than ₹36,270 crore in FY 2014,” she noted, adding that the government has turned banks from being “NPA-laden nightmares” into “pillars of jan kalyan”.
Sitharaman said the government implemented a comprehensive 4Rs strategy of recognising NPAs transparently, resolution and recovery, recapitalising PSBs and reforms.
“From having a ‘twin balance sheet problem’, we now have a ‘twin balance sheet advantage’,” she said, adding that net NPAs of PSBs declined to 0.76% in March 2024 from 3.92% in March 2015 and from a peak of 7.97% in March 2018.
“Gross NPA ratio of PSBs declined to 3.47% in March 2024 from 4.97% in 2015 and from a peak of 14.58% in March 2018,” she said, adding that PSBs declared a dividend of Rs 27,830 crore to shareholders (government of India share Rs 18,088 crore) in FY24.Sitharaman said inclusive schemes like Jan Dhan and MUDRA have ensured widespread access to banking services and the government remains committed to further driving financial inclusion and empowering the underprivileged.The finance minister said that under the UPA, obtaining loans from banks often depended on powerful connections rather than a solid business proposition. “Banks were forced to neglect proper due diligence and risk assessment before sanctioning these loans,” she said, accusing the Congress-led UPA government of turning the banking sector into a cesspool of bad loans, vested interests, corruption and mismanagement.
Sitharaman said banks have recovered more than ₹10 lakh crore from bad loans between 2014 and 2023 and that the Enforcement Directorate has investigated around 1,105 bank fraud cases, which resulted in the attachment of ₹64,920 crore worth of proceeds of crime.
“As of December 2023, assets amounting to Rs 15,183 crore have been restituted to the public sector banks,” she said, adding there was no leniency in recovering bad loans, especially from large defaulters, and the process is ongoing.
