PSU banks report Rs. 87,000 crore loss in FY 2018

PSU banks

Of the 21 state-owned banks, 19 have reported losses crossing a whopping Rs. 87,300 crore in 2017-18 fiscal. They collectively posted a net loss of Rs. 87,357 crore during the fiscal. Punjab National Bank (PNB) was the worst sufferer accounting for a loss of Rs. 12,282.82 crore after it was defrauded by diamond czar Nirav Modi and his uncle Mehul Choksi of more than Rs. 13,000 crore.

The only two banks which posted profits during 2017-18 are Indian Bank and Vijaya Bank. Where Indian Bank’s profit was Rs. 1,258.99 crore, Vijaya Bank posted a profit of Rs. 727.02 crore. Due to fraud, PNB had to suffer a loss of Rs. 12,282.82 crore during the fiscal. Otherwise, during 2016-17, the Delhi-headquartered bank posted a profit of Rs. 1324.8 crore.

State Bank of India also suffered the same way as PNB. It suffered a net loss of Rs. 6,547.45 crore in 2017-18 as against a net profit of Rs 10,484.1 crore in 2016-17.  Meanwhile, IDBI Bank reported losses in both the years. While it reported a loss of Rs. 5,158.14 crore in 2016-17, its net loss widened to Rs. 8,237.93 crore in the fiscal ended March 2018.

Also read: Rs 47,000 crore of bad loans discovered at five biggest state-run banks: RBI

Seeing the mounting burden of bank loans, sic more state-run banks are at a risk of entering the Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework, which include PNB, Syndicate and Union Bank of India. This will take the number of state-run banks under the PCA framework up to 17.

Under the PCA, banks face restrictions on distributing dividends and remitting profits. This includes asking owner to infuse capital into the lender and stopping lenders from expanding their branch networks.

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