State-run banks will be profitable by year-end, says minister Piyush Goyal

Though all 21 public sector banks (PSBs) saw operating profits at the end of FY18, they recorded net losses, barring Vijaya Bank, due to higher provisioning.

The Centre is confident that several public sector banks (PSBs) will begin recording profits at the end of the current fiscal, interim Finance Minister Piyush Goyal said after a day-long meeting with PSB officials on Monday.
 
Though all 21 public sector banks (PSBs) saw operating profits at the end of FY18, they recorded net losses, barring Vijaya Bank, due to higher provisioning. 
 
As of September 2018, the PSBs cumulatively recorded an operating profit of about ₹37,000 crore. 
 
As per minister, many banks are likely to turn profitable by the end of March 2020.
 
“The government assures all support to PSU banks. We are confident that they will become more vibrant and profitable in the days to come,” he was quoted as saying.
 
According to a statement by Ministry of Finance, the interim minister along with Department of Financial Services Secretary Rajiv Kumar held meeting with bank CEOs to review the performance of state-owned banks. 
 
"The review was against the backdrop of visible signs of strengthening of the financial of PSBs as a result of government’s comprehensive 4R’s approach of recognition, resolution, recapitalisation and reforms, which has positioned PSBs to step up their support to meet the lending needs of a growing economy," the ministry said in the statement.
 
The meeting also discussed measures to promote MSME loans, housing loans and agriculture lending. "Banks agreed to work further on increasing use of advanced data analysis and where possible, Artificial Intelligence algorithms for better, faster and hassle-free credit decisions and monitoring of accounts." 
 
Amidst a number of positives, Finance Minister highlighted the need for each and every PSB to ensure that recent gains are sustained and better service delivered to all stakeholders.
 
Banks also committed to step up their efforts for financing under Pradhan Mantri Awas Yojana which is aimed at securing Housing for All by 2022.
 
Earlier on the day, Reserve Bank of India (RBI) governor Shaktikanta Das met the chief executives of the public sector banks (PSBs) and conveyed regulator’s expectations from the banking sector and the state-owned banks in particular.
 
Source: Businessline, PIB, media reports

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