According to the ICRA report, in the last financial year, state-run banks made substantial profits from their bond portfolio. Through this, PSBs booked profit of 31600 crores in the entire financial year.
Banks had a loss of Rs 38,907 crore in 2019-20.
Public sector banks have earned a net profit in the last financial year 2020-21 after suffering losses for five consecutive years. A report by ICRA Ratings said that state-run banks have made unexpected gains on their bond portfolios, turning them into profits again. Through this, PSBs booked profit of 31600 crores while profit before tax stood at 45,900 crores for the entire financial year.
The report said that apart from profit on trading, banks have also been able to return to profits due to lower loan provision on old non-performing assets (NPAs). During the last few years, banks had to make very high provisioning for this. The Icra Ratings report said, “Since the onset of the COVID-19 pandemic, public sector banks are making trading profits on their bond portfolios. After the big cut in the repo rate by the Reserve Bank in March, 2020, banks are making huge profits on bonds. ”
Repo rate cut by 1.15 percent
During March, 2020 to May, 2020, it has been brought down to 3.35 percent by reducing the repo rate by 1.15 percent to four percent and with a reduction of 1.55 percent in the reverse repo rate. Icra Ratings Vice President (Financial Sector Ratings) Anil Gupta said that in the last financial year 2020-21, public sector banks have made a net profit of Rs 32,848 crore. Due to this, banks had a loss of Rs 38,907 crore in the last financial year 2019-20.
good news for banks
This is good news for banks. The government is slowly moving towards privatization of banks. Two banks will be privatized in the current financial year. According to today’s latest report, NITI Aayog has shortlisted Bank of India and Indian Overseas Bank. At present there are 12 public sector banks in the country. Out of these, there are six banks which have been merged. It is believed that sooner or later six banks of the remaining banks will be privatized first. The benefit of banks will help the government in privatization.
Also read, Share Market Updates: Adani Group shares came out, these 2 public sector banks jumped 20% due to the news of privatization
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