Banking Industry Records INR 3 Lakh Crore Profit in FY24

The banking sector in India grew by a staggering 39% in FY24. The net profits of the banking companies swelled from INR  2.2 lakh crore in FY23 to INR 3 lakh crore in FY24. It was the first time in the sector’s history that it has ever crossed the benchmark of 3 lakh crore. The 4R strategy, which the sector is following, has played a major role in achieving this milestone. The strategy has enabled banks to clean up their balance sheets and boost their earnings through its 4 principles: Recognising NPAs, Resolution and Recovery, Recapitalising PSBs, and Reforms in the financial ecosystem.  

However, the growth disparity between public-sector and private-sector banks remains wide. Public-sector banks registered a growth rate of 34% year on year, whereas private-sector banks grew by 42%. In addition, public-sector banks (PSBs) made a net profit of Rs 1.4 lakh crore, and private-sector banks made a net profit of 1.7 lakh crore. But, if we look at the last few years’ results, the gap seems to narrow owing to the growth of PSBs. As per the Economic Times, the net profit of public sector banks has multiplied more than fourfold in the last 3 years. They further mentioned, that the public sector might have made more profits if they didn’t have a one-time provision allocated to pensions. 

Why Is This News Making Headline? 

The Indian banking sector has always been in turmoil. In FY18, banking companies made a record loss of around INR 85,390, and now, in FY 24, they made almost 300% times more profits than IT companies. Their profit in FY 24 was equivalent to the quarterly profits of the listed companies in this fiscal year, thus creating history.

According to the Economic Times, some of the banks that received colossal growth in their net profits are Bank of India, which achieved a 57% growth, reaching Rs 6,318 crore, and Bank of Maharashtra, which saw a 56% increase to Rs 4,055 crore, and Chennai-based India Bank, which recorded a 53% improvement, reaching Rs 8,063 crore.

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