India’s state-run banks are poised to generate nearly $2 billion in dividends for the government in the upcoming fiscal year commencing in April. According to the senior ministry official, this data marks a substantial surge from the current period.
PM Modi has orchestrated measures to fortify these financial institutions since he took office in his first term. His strategies consist of the amalgamation of weaker banks with more robust counterparts and the implementation of bankruptcy laws to reclaim funds from defaulters. The government has invested over 3.3 trillion rupees ($39.7 billion) to recapitalize stressed banks.
State banks will pay dividends totalling at least Rs 150 billion ($1.8 billion) in 2024/25, an increase of 8.7% over the projected Rs 138 billion for the fiscal year ending in March. The net profits of state banks, including the SBI, are set to surpass Rs 1 trillion ($12 billion).
According to India’s financial services secretary, Vivek Joshi, the 12 state-run banks collectively reported net profits amounting to Rs 980 billion in the three quarters ending December. Central bank data shows the improving asset quality of state banks, with gross non-performing assets (GNPAs) dwindling to 3.2% in September 2023 from 9.6% in the March 2017 quarter.
