In the financial year ending March 2024, the cumulative profit of public sector banks exceeded Rs 1.4 trillion, showing a 35% growth compared to the previous year’s high base of Rs 1 trillion. The 12 public sector banks collectively achieved a net profit of Rs 1,04,649 crore in 2022-23.
According to the published numbers on exchanges, out of the total profit of Rs 141,203 crore earned in FY24, the market leader State Bank of India (SBI) accounted for over 40% of the total earnings. SBI’s profit for the year was Rs 61,077 crore, which is a 22% increase compared to the previous financial year’s profit of Rs 50,232 crore.
In terms of percentage growth, Punjab National Bank, based in Delhi, had the highest net profit growth at 228% to reach Rs 8,245 crore. It was followed by Union Bank of India, which saw a 62% rise to Rs 13,649 crore, and Central Bank of India, with a 61% increase to Rs 2,549 crore.
Among the banks that recorded a net profit growth of over 50%, Bank of India experienced a 57% growth to reach Rs 6,318 crore. Bank of Maharashtra saw a 56% rise to Rs 4,055 crore, and India Bank, based in Chennai, recorded a 53% improvement to Rs 8,063 crore.
During the fiscal year ending March 2024, Punjab & Sind Bank, headquartered in Delhi, was the only public sector bank out of the 12 to report a decline in profit. Their annual net profit dropped by 55% from Rs 1,313 crore in 2022-23 to Rs 595 crore.
On the other hand, Bank of Baroda reported a profit of Rs 17,788 crore, while Canara Bank reported a profit of Rs 14,554 crore, both exceeding Rs 10,000 crore.
The public sector banking industry has witnessed a remarkable turnaround, going from record losses of Rs 85,390 crore in FY18 to record profits in FY24. This transformation can be attributed to the initiatives and reforms undertaken by the government, led by Prime Minister Narendra Modi, along with former finance minister Arun Jaitley, his successor Nirmala Sitharaman, and financial services secretaries Rajiv Kumar and their successors.
The government has implemented a comprehensive 4R strategy: Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem.
As part of the strategy, the government infused an unprecedented Rs 3,10,997 crore to recapitalise PSBs during the last five financial years — from 2016-17 to 2020-21. The recapitalisation programme provided much-needed support to the PSBs and prevented the possibility of any default on their part.
The reforms undertaken by the government over the last nine years addressed credit discipline, ensured responsible lending and improved governance. Besides, there was the adoption of technology, and amalgamation of banks, and the general confidence of bankers was maintained.