FM to PSU banks: Take action on wilful defaulters

New Delhi: Finance Minister Nirmala Sitharaman has asked public sector banks (PSBs) to take swift action in cases concerning fraud and wilful defaults to reduce bad loans and take steps to accelerate growth momentum, sources said.

Banks have written off Rs 11.17 lakh crore bad loans from their books in the last six years till the financial year 2021-22.

The non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, are removed from the balance sheet of the bank concerned by way of write-off.

In a recent meeting with heads of PSBs, the finance minister urged them to focus on having robust risk management practices and mitigating Cyber Security risks.

During the meeting, it was also emphasised that banks should follow a strong internal audit framework and adherence to caveats of internal policies, sources said.

Some of the challenges highlighted during the meeting included the declining share of market share in terms of advances, and low-cost deposit mobilisation.

It was also pointed out that PSBs should brace for increased competition for deposits due to the merger of HDFC Ltd with HDFC Bank.

Now HDFC Ltd housing loan customers will be tapped by HDFC Bank for retail banking. Another area of concern was pressure on the net interest margin of PSBs due to the high-interest rate regime. (PTI)