Bad loan recovery in Q1 for PNB and Indian Bank exceeded that of 2017-18.
Indian state banks are slowly regaining their footing as they recover over $5.23b (INR 365b) of nonperforming assets (NPA) in Q1 which represents almost half the recoveries in the full year 2017-18 period.
Sustained recovery of soured loans from insolvency cases particularly in the steel sector propelled banks to more steady footing.
If the current positive momentum is sustained, banks may just close the year with nearly double the amount of soured assets they recovered in 2017-18 slump.
"Resurgent PSBs (public sector banks), the nation's growth engines...put worst behind,” financial services secretary Rajeev Kumar said in a statement.
Fraud-hit Punjab National Bank along with Indian Bank registered Q1 NPA recovery higher than their figure for 2017-18 at $1.21b (INR 84.45b) and $100.11m (INR 6.98b). State Bank of India, Bank of Baroda and Bank of India also witnessed similar improvements.
For instance, loan recovery for SBI in Q1 clocked in at $347.94m (INR 24.26b) on a year-on-year basis. For BoB and Bank of India, it was twice the level seen in the June quarter of the previous year.
Tighter central bank regulations have prompted lenders to step up their nonperforming loan (NPL) recognition, leading to a record loss of more than $9b for public sector banks (PSUs) in Q1.
Photo from Manjulkumar - Own work, CC BY 3.0
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