The Modi government has turned around the banking sector through various reforms and improved governance which has led to banks recovering more than Rs 10 lakh crore from bad loans between 2014 and 2023, Finance minister Nirmala Sitharaman said on Friday.
The FM said the Enforcement Directorate has investigated around 1,105 bank fraud cases, which resulted in the attachment of Rs 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 (PSBs).
“Recently, India’s banking sector achieved a significant milestone by recording its highest-ever net profit, crossing Rs 3 lakh crore. The banking sector turned around due to PM Shri @narendramodi’s strong and decisive leadership. Our government atoned for the UPA’s sins in the banking sector through comprehensive and long-term reforms,” Sitharaman said in a post on X.
She said there has been no leniency in recovering bad loans, especially from large defaulters, under the Modi government and the process is ongoing.
“As of December 2023, assets amounting to Rs 15,183 crore have been restituted to the public sector banks (PSBs). There has been no leniency in recovering bad loans and the process is ongoing,” the finance minister said.
The banking sector, considered the backbone of a nation’s economy, recently achieved a significant milestone by recording its highest-ever net profit, crossing Rs 3 lakh crore in 2023-24, up from Rs 2.2 lakh crore in FY23.
During FY 2023-24, public sector banks recorded the highest-ever aggregate net profit of Rs 1.41 lakh crore, a four-fold surge over Rs 36,270 crore in FY 2014. The lenders declared a dividend of Rs 27,830 crore to their shareholders in FY24. Net NPAs of the state-run banks declined to 0.76 percent in March 2024 from 3.92 percent in March 2015, and from a peak of 7.97 percent in March 2018, she said.
“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.
Sitharaman said the Modi government implemented a comprehensive 4R’s strategy of Recognising NPAs transparently, Resolution and Recovery, Recapitalising PSBs, and Reforms after coming to power in 2014. “Our reforms addressed credit discipline, recognition and resolution of stress, responsible lending and improved governance. We replaced political interference in banks with professional integrity and independence,” she said.
The minister said the Modi government will continue to take decisive measures to strengthen and stabilise our banking system, ensuring banks support India’s growth path to Viksit Bharat by 2047.“The UPA Alliance, dominated by dynastic parties, used banks for their own ‘Parivar Kalyan’ (family welfare).
In contrast, our government has leveraged banks for ‘Jan Kalyan’ (public welfare),” she saidEfforts to expand banking in India faltered for decades due to Congress’s limited actions beyond bank nationalisation, which benefitted mainly the educated and elite. Before 2014, banking access was largely restricted to cities, she said.
“We remain committed to further driving financial inclusion and empowering the underprivileged,” Sitharaman said.
With inputs from agencies.
Link to article –
Modi govt transformed banking sector, Rs 10 lakh crore bad loans recovered: Nirmala Sitharaman
