All PSBs Reported Net Profit During First 9- months of FY22: Govt
Moneylife Digital Team 29 March 2022
All public sector banks (PSBs) have been posting aggregate operating profits since FY16; however, due to the provisions on account of non-performing assets (NPAs), some PSBs reported net losses. Notwithstanding the NPA provisions, during the first nine months of FY22, all PSBs have reported net profit, the Lok Sabha was informed.
In a written reply, Dr Bhagwat Karad, minister of state for finance, says, "As a result of the Union government's strategy of recognition, resolution, recapitalisation and reforms, NPAs of PSBs have declined to Rs5.60 lakh crore as of 31 December 2021 from Rs2.17 lakh crore as of 31 March 2014."
"Throughout this period, PSBs continued to post aggregate operating profits of Rs1,37,151 crore, Rs1,58,994 crore, Rs1,55,603 crore, Rs1,49,819 crore, Rs1,74,640 crore, Rs1,97,376 crore, and Rs1,47,686 crore, in the FY16, FY17, FY18, FY19, FY20, FY21 and the first nine-months of FY22, respectively. However, primarily due to provisions on account of NPAs, some PSBs reported net losses. Further, PSBs have now returned to profitability, with all PSBs reporting net profit in the first nine-months of FY22," Dr Karad says. 
Pratima Mondal, a member of Parliament (MP) from Jaynagar (West Bengal), has asked for details of PSBs earning profit or incurring losses during the last three years. The All India Trinamool Congress MP also wanted to know whether the loss incurred by PSBs is due to increase in the incidents of frauds in the said banks.
According to Dr Karad, the Reserve Bank of India (RBI) issued master directions for classification and reporting of frauds by commercial banks and select financial institutions (FIs), to direct the focus of banks on the aspects relating to prevention, early detection, prompt reporting to RBI and the investigating agencies, and timely initiation of the staff accountability proceedings. Also, RBI has provided an illustrative list of some early warning signals (EWS) to detect fraudulent activity in an account.
To help deter fraudsters and defaulters, the government came up with several measures, including, setting up an online searchable database of frauds reported by banks, in the form of Central Fraud Registry, to enable timely identification, control and mitigation of fraud risk and carrying out due diligence during the credit sanction process. 
Further, Dr Karad says, the Union government's framework for large value frauds in PSBs mandates examination be initiated for wilful default immediately upon reporting fraud to RBI and report on the borrower be sought from the Central Economic Intelligence Bureau (CEIB) in case an account turns NPA.
In cases of frauds, heads of PSBs have been empowered to issue requests for issue of look-out circulars (LOCs), the minister says, adding, for companies availing loan facilities of more than Rs50 crore, PSBs are advised to obtain certified copy of the passport of the promoters and directors and other authorised signatories of the company. 
PSBs are also advised to decide on publishing photographs of wilful defaulters, in terms of the instructions of RBI and as per their board-approved policy, Dr Karad added.
3 months ago
crowd foto and profit things do not add up
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