Rs 87,300 Crore Loss Posted From 21 State-Run Banks

State-run banks have reported a total loss of Rs 87,300 crore in 2017-18 fiscal. Out of these 21 banks, only two have reported profits.

Indian Bank posted the highest profit of Rs 1,258.99 crore, and Vijaya Bank posted profits worth Rs.727.09 crore. The Nirav Modi orchestrated scam cost PNB a loss of Rs 12,282.82 crore. However, it posted a profit of Rs 1,324.8 crore in the 2016-17 fiscal. The total net profit posted by the state-owned banks was Rs 473.72 crore.

State Bank of India’s came in second after PNB, with losses amounting to Rs 6,547.45 crore, against a net profit of Rs 10,484.1 crore in 2016-17. These two public sector lenders (PSBs) IDBI Bank came in second after PNB with a net loss of Rs 8,237.93 crore in the fiscal, from Rs 5,158.14 crore in the previous year.

Bank of Baroda, Bank of India, IDBI Bank, Corporation Bank, Indian Overseas Bank, United Bank, and Andhra Bank, are yet to declare their results.

Finance Minister Piyush Goyal announced that a committee will be set up for the formation of an Asset Reconstruction company, or an Asset Management Company, which will give recommendations for faster resolution of stressed accounts. Reports also say that committee will consider whether such an arrangement will be good for the banking system and, if any such suggestion is advisable, it will also consider the modalities by which such an ARC and/or and AMC should be set up.

Mounting bank loans and a number of frauds and scams have easily contributed to these losses. In February, the central bank brought out a rule forcing banks to immediately recognise troubled accounts. Lenders are also required to act promptly, leaving little room for any accounting jugglery. In the past, banks were blamed for letting entities borrow afresh to repay old loans, further adding to the problem instead of dispelling it.