Scheduled Commercial Banks (SCBs) in India have achieved a significant milestone by recording the highest-ever aggregate net profit of ₹23.50 lakh crore in FY2023-24, compared to ₹22.63 lakh crore in FY2022-23, according to the Ministry of Finance.
The asset quality of SCBs has also improved remarkably, with the gross non-performing asset (NPA) ratio declining to 2.67% (₹4.75 lakh crore) in June 2024 from a peak of 11.18% (₹10.36 lakh crore) in March 2018. Public Sector Banks (PSBs) reported a similar improvement, with their gross NPA ratio dropping to 3.32% in June 2024, compared to 14.58% in March 2018 and 4.97% in March 2015.
Additionally, the provision coverage ratio (PCR) of SCBs has risen from 49.31% in March 2015 to a robust 92.52% in June 2024, reflecting increased resilience in the banking sector.
The Reserve Bank of India’s recent stress test results indicate that SCBs remain well-capitalized and capable of withstanding macroeconomic shocks without requiring additional capital infusion. All banks are expected to meet the minimum regulatory Common Equity Tier 1 (CET1) ratio of 5.5%, even under severe stress scenarios.
PSBs recorded their highest-ever net profit of ₹1.41 lakh crore in FY2023-24, up from ₹1.05 lakh crore in FY2022-23. In the first half of FY2024-25, PSBs achieved a net profit of ₹0.86 lakh crore, underscoring their strong financial performance.
(ians)
