With rising bad loans, bank frauds, cash crunch and other issues, Reserve Bank Governor Urjit Patel has said the Reserve Bank needs more powers to oversee public sector banks (PSBs). There are 21 state-owned banks, including State Bank of India. In the last financial year, their combined losses crossed a whopping Rs 87,300 crore, topped by scam-tainted Punjab National Bank which took a hit of nearly Rs 12,283 crore.
Of the 21 state-owned banks, only two banks, Indian Bank and Vijaya Bank, posted profits during FY18. Indian Bank posted the highest profit of Rs 1,258.99 crore and Vijaya Bank's profit was Rs 727.02 crore in the fiscal.
The governor said that the RBI has 'inadequate' control over PSBs. However, he stated that the situation on the NPA front has been improving after implementation of the Insolvency and Bankruptcy Code (IBC). Besides, he added that steps were being taken to strengthen the banking system. Gross non-performing assets (NPA) of the entire banking sector stood at Rs 8.31 lakh crore at end-December 2017.
