Indian economy has moved away from twin-balance sheet problem

Indian economy has moved away from twin-balance sheet problem, banks now profitable: FM

Finance Minister Nirmala Sitharaman at the inauguration of the new corporate office of the Punjab & Sind Bank at East Kidwai Nagar, in New Delhi on July 1, 2023. 

Finance Minister Nirmala Sitharaman said on July 1 that the Indian economy has moved away from the twin-balance sheet problem of banks and corporates to twin-balance sheet advantage because of the concerted efforts of the Modi Government.

Profit of public sector banks increased to ₹1.04 lakh crore in 2022-23, tripling from what it was in 2014, the Minister said while inaugurating the corporate office of Punjab & Sind Bank in New Delhi.

The twin-balance sheet problem refers to deterioration in financial health of banks and corporates at the same time.

"As a result [of various initiatives of the government] I'm glad to say the problems of twin-balance sheets have gone away like the Reserve Bank observing it is a twin-balance sheet advantage that the Indian economy is benefiting from," Ms. Sitharaman said.

The Minister said the term twin-balance sheet was heard after a long time and according to the Reserve Bank, the Indian economy is now benefiting from the twin-balance sheet advantage.

She said that the performance of the public sector banks has improved on account of various initiatives taken by the Modi government since 2014.

There was an improvement in all critical parameters like return on asset, net interest margin and provisioning coverage ratio, she added.

The 4R strategy followed by the Modi government to revitalise the state-owned banks has yielded results, she said.

The 4R strategy refers to recognising the problem of non-performing assets, recapitalising the banks, resolving their problems, and reforming them.

Ms. Sitharaman further said the banks should endeavour to adopt a proactive approach in reaching out to people to achieve optimum utilisation of financial inclusion schemes.

There should be a focus on credit outreach in states where the credit offtake is lower than the national average, particularly in the northeast and eastern parts of the country, she said, adding they must aim to increase brick-and-mortar banking presence in border areas, particularly in the those covered in the Vibrant Village Programme.

The minister also recalled the story of the Punjab and Sind Bank, which had suffered due to partition in 1947. Only two of the ten branches remained in India, while the rest went to Pakistan.

Starting from just two branches in 1947, the Punjab and Sind Bank has 1,553 branches, and the 1,554th at Karimganj in Assam was inaugurated remotely by the minister on Saturday. 

Reference link: https://www.thehindu.com/business/Economy/indian-economy-has-moved-away-from-twin-balance-sheet-problem-banks-now-profitable-fm/article67030381.ece

July 01, 2023 01:45 pm | Updated 04:00 pm IST - New Delhi

Comments

Post a Comment

Popular posts from this blog

Challenges faced by CMA students & Smart strategies to succeed in Exams

What is CMA?   The Cost and Management Accountant (CMA) is a professional certification in management accounting and finance. The certification indicates that the individual is knowledgeable in the areas of financial planning, analysis, control, decision support, and professional ethics. There are numerous professional bodies worldwide that offer management accounting professional certifications. CMA (India) certification is issued by the Institute of Cost Accountants of India (ICMAI).  Strategic professionals known as Cost Management Accountants (CMAs) use their analytical skills to improve the performance and prosperity of the companies they work for. They usually operate in a variety of industries, such as government organizations, non-profits, and corporations. With titles like financial analyst, cost accountant, corporate controller, financial planner, or Chief Financial Officer (CFO), CMAs frequently hold important leadership roles. They actively participate in form...
Read more

TDS Rate Chart for FY 2025-26 AY 2026-27

  TDS Rate Chart for FY 2025-26 AY 2026-27 TDS (Tax Deducted at Source) rate chart is a comprehensive table that outlines the applicable tax deduction rates for various types of payments under the Income Tax Act, 1961. This TDS percentage chart specifies the percentage of tax to be deducted by the payer before making payments such as salaries, interest, rent, professional fees, and commissions. The TDS slab rates varies based on the nature of the transaction and the recipient’s category, such as individuals, companies, or non-residents. Updated annually in the Union Budget, the TDS rate chart helps taxpayers and deductors comply with tax regulations and avoid penalties for non-compliance.   Budget 2025: Key TDS Changes Effective from April 1, 2025 The Budget 2025 has revised threshold limits for TDS, ensuring that smaller transactions remain exempt from tax deduction, thereby reducing the compliance burden. These revised limits, effective fro...
Read more

Top 10 Jobs After BCom — Your Career Roadmap

 1. Chartered Accountant (CA) — Avg salary ₹7–25 LPA after qualification 2. Financial Analyst — Analyse markets, salary ₹4–15 LPA 3. Cost & Management Accountant (CMA) — Perfect for manufacturing firms 4. Company Secretary (CS) — Corporate legal compliance expert 5. Investment Banker — Work with stocks, mergers, and acquisitions 6. Tax Consultant — High demand in GST era, salary ₹3–10 LPA 7. Actuary — Maths + Finance = ₹10–30 LPA salary potential 8. Data Analyst — Trending role combining Excel/SQL with commerce 9. Stock Broker / Trader — Work in NSE/BSE, SEBI regulated 10. Entrepreneur — BCom gives the perfect base to start your own business!
Read more