Indian economy has moved away from twin-balance sheet problem: FM

Finance Minister Nirmala Sitharaman said on Saturday that the Indian economy has moved away from the twin-balance sheet problem of banks and corporate  to twin-balance sheet advantage because of the concerted efforts of the Modi government. Profit of public sector banks increased to Rs 1.04 lakh crore in 2022-23, tripling from what it was in 2014, the minister said while inaugurating the corporate office of Punjab & Sind Bank in New Delhi. The twin-balance sheet problem refers to deterioration in financial health of banks and corporates at the same time. She said performance of public sector banks have improved on account of various initiatives taken by the Modi government since 2014. There was an improvement in all critical parameters like return on asset, net interest margin and provisioning coverage ratio.

The Non-Performing Assets (NPAs) of the Indian banks is estimated to reduce further to a decadal low of 3.8 per cent by end of FY 2023-24, Credit rating agency Crisil has stated.

- Smt @nsitharaman at the inauguration of new corporate office of @PSBIndOfficial in New Delhi. pic.twitter.com/o22aNNOfvk

— Nirmala Sitharaman Office (@nsitharamanoffc) July 1, 2023

She appreciates the state-run banks for becoming profiteering. Sitharaman said that despite the stable rating outlook, some global banks collapsed but Indian banks are doing well because of professionalism in management. The finance minister said that PM Modi-led Central government timely realised that banks were going through crisis. However, the government's 4R formula--Recognition, Resolution, Recapitalisation, and Reforms made the banks stable and posted good profits.