Indian economy moves away from double balance sheet problem, banks are now profitable: F.M

Union Finance Minister Nirmala Sitharaman on July 1 said that with the concerted efforts of the Modi government, the Indian economy has moved away from the dual balance sheet problem of banks and corporates towards a dual balance sheet account.

The profit of public sector banks is expected to increase to ₹1.04 lakh crore by 2022-23, a threefold increase from 2014, the minister said while inaugurating the corporate office of Punjab & Sind Bank in New Delhi.

The twin balance sheet problem meant that the financial health of banks and corporates deteriorated simultaneously.

„as a consequence [of various initiatives of the government] I am happy to say that the problems of dual balance sheets have been removed as the RBI recognizes the benefit of dual balance sheets that benefit the Indian economy,” said Ms. Sitharaman.

The minister said that the dual balance sheet was asked for after a long time and according to the Reserve Bank, the Indian economy is now benefiting from the dual balance sheet advantage.

He said that since 2014, the performance of public sector banks has improved due to various initiatives taken by the Modi government. There has been improvement in all important parameters like return on assets, net interest margin and provision coverage ratio.