The performance of banks in India has been very impressive. PSBs are not far behind in the race. With regard to performance indices like profitability, NPAs, productivity, capital base etc., banks have been generally showing improved results. The challenges for the future are consolidation and corporate governance.
Banking system in India has been prospering, especially during the last fiscal as well as the current one. Bank credit as on December 31, 2004 has crossed the "10 lakh crore" mark, while the deposits surpassed "16 lakh crore" mark. The credit deposit ratio has vastly improved to 62.54% from 58.7% as on March 31, 2004, thereby proving that banks are no longer credit shy and are in fact meeting the requirements of higher credit needs of a growing economy.
Banks have performed creditably last fiscal. While deposits for the scheduled commercial banks have grown by 17.5% (as against 13.4% for the previous fiscal), non-food credit expanded by 18.4% (18.6%). Net profit has recorded a marginal rise to 1.1% as percentage by gross assets, from the previous fiscal figure of 1%. So is the spread, from 2.8% to 2.9%. However, it is in the area of curtailment of NPAs, the performance stands out: Net NPAs have improved to 2.9% from the corresponding figure of 4.4% for the previous fiscal. Obviously the multi-dimensional strategies for recoveries adopted by banks in the form of onetime settlements/compromise schemes, Lok Adalats, Debt recovery tribunals, securitization Act provisions, corporate debt restructuring, Asset Restructuring Companies Act, have been collecting yielding the desired results.
|
