Total net loss of public sector banks topped Rs 87,000 crore in 2017-18

NEW DELHI: The cumulative loss of public sector banks crossed a whopping Rs 87,357 crore in the 2017-18 fiscal, with scam-tainted Punjab National Bank topping the chart with a hit of nearly Rs 12,283 crore followed by IDBI Bank.nnOut of 21 state-owned banks, only two — Indian Bank and Vijaya Bank — posted profits during 2017-18. Indian Bank posted highest profit of Rs 1,258.99 crore and the Vijaya Bank’s profit worked out to be Rs 727.02 crore.nnThe rest 19 government-run banks collectively posted a net loss of Rs 87,357 crore during the fiscal, as per the latest quarterly numbers posted by these lenders.nnAll 21 banks had together posted a net profit of Rs 473.72 crore in the 2016-17 fiscal.nnPunjab National Bank, which is reeling under over Rs 14,000-crore scam allegedly perpetrated by Nirav Modi and associates, posted a net loss of Rs 12,282.82 crore last fiscal. In 2016-17, the Delhi-headquartered bank had posted a profit of Rs 1,324.8 crore.nnPNB was followed by IDBI Bank, whose net loss widened to Rs 8,237.93 crore in the fiscal ended March 2018 from Rs 5,158.14 crore in the previous year.nnIndia’s largest bank State Bank of India too added hugely to the combined losses of PSBs. SBI’s net loss in 2017-18 stood at Rs 6,547.45 crore as against a net profit of Rs 10,484.1 crore in 2016-17.nnIndian banking sector is grappling with mounting non-performing assets (NPAs) and host of scams and frauds.nnThe NPA in the banking sector stood at Rs 8.31 lakh crore as of December 2017.nnWeak financials due to mounting bad loans have already pushed 11 banks, out of 21 state-owned banks, under the Prompt Corrective Action (PCA) framework of the Reserve Bank.nnThe recent tight prudential norms released by the RBI on February 12 have added to the NPA woes.nnInterim Finance Minister Piyush Goyal has announced setting up of a committee to give recommendations in two weeks on formation of an Asset Reconstruction Company for faster resolution of stressed accounts.nnThe committee under Sunil Mehta, non-executive chairman of PNB, will make recommendations in two weeks on setting up of an Asset Reconstruction Company or Asset Management Company for faster resolution of stressed accounts.nnThe finance minister said the 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.nnSource: Press Trust of India