GNPA of PSBs declined from the peak of 14.58% in Mar-18 to 3.12% in Sep-24
GNPA of PSBs declined from the peak of 14.58% in Mar-18 to 3.12% in Sep-24
The Government has been proactively supporting the banking ecosystem and taking care of both business and employee welfare to maintain stability, transparency, and growth. Over the past decade, multiple citizen-and-staff-centric reformative initiatives have been taken by the Government in this direction. Following is a brief snapshot of the reforms in banking sector:
REFORMS IN THE BANKING SECTOR AND PERFORMANCE OF PUBLIC SECTOR BANKS (PSBS):
RBI initiated Asset Quality Review (AQR) in 2015 to identify and address the issue of stress in the banking system, under which, after transparent recognition by banks and withdrawal of the special treatment of restructured loans, stressed accounts were reclassified as Non-Performing Assets (NPAs) and expected losses on stressed loans, not provided for earlier as a result of the special treatment, were provided for, resulting in higher NPAs which peaked in 2018. Higher NPA and necessitated provisioning deeply impacted the financial parameters of banks and impeded their ability to grow and lend to productive sectors of the economy.
Since 2015, the Government implemented a comprehensive 4R’s strategy of Recognising NPAs transparently, Resolution and Recovery, Recapitalising PSBs, and Reforms in the financial system to address the challenges faced by PSBs. And as a result of the Government’s overarching policy reforms, the financial health and robustness of banking sector including of PSBs, has improved significantly. Notable improvements are visible through: –
PSBs continue to expand their reach to every nook and corner of the country to deepen Financial Inclusion. Their capital base has strengthened and their asset quality has improved. Now they are able to go to market and access capital instead of depending upon the Government for recepitalisation.
HR POLICIES AND WELFARE MEASURES IN PUBLIC SECTOR BANKS
Transfers in PSBs:
With an aim to promote greater transparency and ensure formulation of a uniform, non-discretionary transfer policy, comprehensive advisory has been issued which is to be incorporated by the PSBs in their respective transfer policies.
In respect of women employees, PSBs have been, inter alia, advised that :
Welfare Measures for PSB Employees:
Through the implementation of 12th BPS, the bank employees received a 17% increase in salary and allowance (Rs. 12,449 crore) including a load of 3% (Rs 1,795 crore).
Major Highlights:
A monthly Ex-gratia amount to pensioners and family pensioners for the current bipartite period has been introduced.
Ex-gratia to Pre-1986 retirees and their families have been increased from Rs. 4,946/- and Rs. 2,478 respectively to Rs. 10,000/- per month in both cases. It will benefit 105 retirees and 1382 spouses. Total additional cost is Rs. 4.73 crores per annum. It is implemented since Feb’2023.
100% DA neutralization was given to pre-2002 retirees. 1,81,805 beneficiaries will be benefitted due this which will have a total additional cost of Rs. 631 crore per annum. It is implemented since Oct’2023.
Option to opt for pension was provided to bank resignees who were otherwise eligible to join pension scheme. This measure will benefit approximately 3198 bank retirees and families. The total additional cost is Rs. 135 crore per annum.
Staff welfare fund (SWF) is a fund allocated by the PSBs for the welfare-related activities (health-related expenses, subsidies on canteen sports and cultural activities, education-related financial assistance etc.) of working and retired officials of PSBs. SWF was given a fillip by increasing the maximum ceiling of annual spending. The ceiling, last revised in 2012, was thoroughly revised after taking into consideration the number of employees and retirees in PSBs as of 2024 and the change in the business mix of the PSBs. Post revision, the combined maximum annual expenditure ceiling of SWF for all the 12 PSBs has increased from 540 crore to 845 crore. This increase will benefit 15 lakh staff including the retired employees of all the 12 PSBs.
- Improvement in Asset quality —