In a move to review the status of financial health of all public sector banks, Finance Minister Piyush Goyal will meet heads of 13 PSBs on Tuesday and it is expected that some solution concerning in the system is in the offing. This is the first meeting with the heads of the PSBs after their annual financial result for 2017-18. Most of the banks posted loss in the fourth quarter of the last fiscal.
Sources close to the development said the meeting has been organised by largest lender of the country, State Bank of India (SBI) and will be chaired by Goyal in the capital. “All heads of 13 PSBs will participate in the meeting to discuss the way forward for the Indian Banking system,” sources added.
The meeting will see participation from PNB, Oriental Bank of Commerce, Punjab and Sind Bank, Uco Bank, United Bank of India and Allahabad Bank. Besides, Managing Director of Bank of Maharashtra, Andhra Bank, Canara Bank, Indian Bank and Vijaya Bank would be present in the meeting.
The Nirav Modi fraud-hit Punjab National Bank (PNB) alone posted a loss of Rs 13,416.91 crore for the quarter ended March 31, the largest ever quarterly loss by a bank. The PNB provided for Rs 7,178 crore, 50 per cent of the total amount of Rs 14,356 crore liability with regard to Nirav Modi fraud, in the fourth quarter of 2017-18. The remaining amount will be covered in the three quarters of the current fiscal year.
It is followed by the country’s largest lender SBI posting Rs 7,718 crore loss for the January-March period, more than twice the Rs 3,442-crore loss reported for fourth quarter of the previous fiscal. The jump in losses follows Rs 24,080-crore kept for provision towards bad loans after the RBI scrapped all loan restructuring schemes.
The banks also had to make a Rs 4,761-crore provision towards depreciation in the value of its bond portfolio.
Besides, almost all banks reported increase in non-performing assets due to February 12 guidelines of the Reserve Bank of India (RBI). The new guidelines have specified framework for early identification and reporting of stressed assets.