Public sector banks turn to the government instead of becoming autonomous

- The whole of economics: Dhawal Mehta

- Even after thirty years of liberalization

- NPA ratio of public sector banks is relatively higher than that of private banks.

The government's huge spending on education and health services (including tap water for every household) is a step towards a welfare state. But even achieving the target of having one doctor per thousand population in India will take three to four years. In all this, instead of increasing public spending and doing charity work to get votes, the government sees the plight of public sector banks. Increasing the non-performing assets of India's public sector banks is a gross misuse of public money. It is true that Indira Gandhi nationalized banks in the 19th century and thus facilitated rural banking in India, but the percentage of non-performing assets in the public sector in India is much higher than the non-performing assets in the private sector. This is a misuse of public money which should be used in the field of education and health. The government has recently talked of privatizing two public sector banks but the move is not enough. There are twelve public sector banks in India. The Reserve Bank is their apex.

According to a report by the Reserve Bank of India, non-performing assets (NPAs) of public (ie government) banks in India accounted for 4.5 per cent of total lending in March 2021 and will increase to 12.5 per cent by March 2039. Micro, small and micro enterprises and the retail sector are facing severe stress in repaying loans. Leading public sector Indian bank's gross NPA has reached 11.5 per cent. This is an unforgivable thing. At the end of June 2021, Bank of India's gross NPA was as high as 17.61 per cent. Even a year ago, it was 12.51 per cent, which is also unacceptable. At the end of June 2021, Canara Bank was doing well. It had an NPA of 7.50 per cent, up from 7.5 per cent in the same period last year. NPAs of private sector banks are only 3 to 4 per cent. There are twelve government banks in India: Punjab National Bank, Indian Bank, State Bank of India, Canara Bank, Union Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra, Punjab and Sind Bank, Bank of India, Central Bank of India. , Bank of Baroda See if their incompetence and money wasted? These 12 state-owned banks have had to write off loans worth Rs 3 lakh crore due to their incompetence. How much would the country have benefited if this amount had been spent on education and health? The government has set up a National Assets Reconstruction Company to recover some of the unpaid loans. The government has handed over the responsibility of recovering assets worth Rs 2 lakh crore but we do not believe that the company will make a big recovery out of it. Public sector banks hand over their non-performing assets to the National Assets Reconstruction Company for recovery purposes so that the assets of these banks are cleared but this is to shift the responsibility of your failure to another company. So in total, only people are harmed. This loss has to be compensated from the taxes of the people. You donate so much to get cheap votes that the country's economy is in danger.

People deposit billions of rupees in public sector banks in India. Because people have unshakable faith in public sector banks. But Fa. Out of the total deposits of the country in 2016, deposits of public sector banks were 7.5 per cent. It fell to 7.5 per cent in the year. It fell instead of rising. Fa. व. Loans and advances made by public sector banks in 2021 increased by 6.5 per cent over the previous year. While in private sector banks, compared to last year, F.V. In 2021, loans and advances increased by 7.5 per cent. This has given more leeway to private sector banks to digitize their transactions. We are against privatization but it does not run loss-making public enterprises.

Thirty years after 191, it is a shame that public sector banks, instead of becoming autonomous, turn to the government and ask for its help.