Page 5 - Banking Finance January 2024

BANK UPDATE

Banking

News

Global banks have a bad because major central banks will begin PSBs given Rs. 15000 crore
to drop interest rates, but credit will
prognosis for 2024, ac- still be scarce. on ED action

cording to Moody's Over Rs 15,000 crore confiscated by
According to Moody's Investors Ser- Banks write off Rs. 10.57 the Enforcement Directorate (ED)
from defaulters have been paid back to
vice, there is a poor forecast for inter- trillion in 5 years
national banks in 2024 because of the public sector banks, Finance Minister
Banks have written off Rs 10.57 lakh Nirmala Sitharaman informed.
slower GDP growth brought about by
crore during the last five financial
central banks' stricter monetary poli- "As of December 1, 2023, assets
years, of which Rs 5.52 lakh crore was
cies. According to the report, the prof- amounting to Rs 15,186.64 crore un-
in respect of loans pertaining to large
itability of Indian banks will rise due to der the PMLA have been confiscated
industries, the government informed
reduced provisioning costs and strong by the ED out of which Rs 15,183.77
the Parliament. "As per RBI data,
expansion in higher-yielding retail cat- crore have been restituted to the pub-
scheduled commercial banks (SCBs)
egories. lic sector banks. PMC Bank (now
have written off an aggregate loan
"Our outlook for global banks for 2024 amount of Rs 10.57 lakh crore during merged with Unity Small Finance Bank)
is negative as central banks' tighter the last five financial years," Minister has recovered Rs 104.02 crore with
monetary policies have resulted in of State for Finance Bhagwat Karad active cooperation and support from
lower GDP growth. Reduced liquidity said in reply to a question in the Rajya agencies. Assets amounting to Rs
and strained repayment capacity will Sabha. 692.89 crore have been confiscated
squeeze loan quality, leading to under the provisions of the Fugitive
greater asset risks," stated Moody's in The scheduled commercial banks have Economic Offenders Act, 2018,"
also recovered Rs 7.15 lakh crore of Sitharaman said replying to supple-
its report on the global banking out-
non-performing assets (NPAs) during mentary questions in the Rajya Sabha.
look.
the five-year period. Sitharaman informed the Lower House
Gains in profitability will probably be
offset by increased finance costs, "Comprehensive steps have been taken that as of March 31, 2023, legal suits
to recover NPAs, enabled by which, were filed for recovery against 13,978
slower loan growth, and reserve accu-
SCBs have made an aggregate recov- loan accounts, action under the
mulation. Liquidity and funding will be
ery of Rs.7,15,507 crore (RBI provi- SARFAESI Act has been initiated in
increasingly challenging.
sional data for FY 2022-23) in NPA ac- 11,483 cases, FIRs have been filed in
It claimed that strict monetary policies counts, including written-off loans, dur- 5,674 cases, and an aggregate
will worsen the business environment. ing the last five financial years," he amount of Rs 33,801 crore has been

In 2024, GDP growth will be slower said. recovered.

BANKING FINANCE | JANUARY | 2024 | 5