Why in News?
The Finance Ministry informed the Rajya Sabha that Public Sector Banks (PSBs) recorded a record net profit of ₹1.98 lakh crore in FY26, an increase of 11% over the previous year. The Ministry also noted that Gross Non-Performing Assets (GNPAs) have fallen to multi-decadal lows, reflecting a significant improvement in the health of the banking sector.
Key Highlights
- Improved asset quality: Gross Non-Performing Assets (GNPAs) declined to multi-decadal lows.
- Credit-deposit gap: Credit growth continues to outpace deposit growth, posing funding challenges.
- Official source: Data was presented by the Finance Ministry in the Rajya Sabha.
What are Non-Performing Assets (NPAs)?
- An NPA is a loan on which interest or principal remains overdue for more than 90 days.
- NPAs are classified as:
- Gross NPA (GNPA): Total value of all non-performing loans.
- Net NPA (NNPA): GNPA minus provisions made by banks.
Why Has Asset Quality Improved?
- Stronger loan recovery through the Insolvency and Bankruptcy Code (IBC), 2016.
- Better credit appraisal and risk management by banks.
- Higher provisioning and recapitalisation of PSBs.
- Recovery through SARFAESI Act, 2002 and Debt Recovery Tribunals (DRTs).
- Improved monitoring using technology and data analytics.
[2022] With reference to the ‘Banks Board Bureau (BBB) which of the following statements are correct?
1. The Governor of the Chairman of BBB.
2. BBB recommends for the selection of head for Public Sector Banks.
3. BBB helps the Public Sector Banks in developing strategies and capital raising plans.
Select the correct answer using the code given below:
[A] 1 and 2 only
[B] 2 and 3 only
[C] 1 and 3 only
[D] 1, 2 and 3