Finance Minister Nirmala Sitharaman praised the performance of public service banks in the past few quarters and the way they have managed to deal with issues like no-performing assets. During her address at the inauguration ceremony of a Punjab and Sind Bank corporate office, she said that the country is now having the 'Twin Balance Sheet Advantage’, and banks are now making good profits, benefiting the economy.

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"Due to various reform measures adopted by the Govt, we're now having ‘Twin Balance Sheet Advantage’. Banks are now making good profits; their net worth has risen; and they are also expanding their businesses. This benefits the economy," said the Finance Minister.

She pointed out that when the BJP government came to power, the banking sector was dealing with the 'Twin Balance Sheet Problem'. The twin-balance sheet problem refers to the deterioration in the financial health of banks and corporates at the same time.

"In 2014, when we came to power, we inherited the ‘Twin-Balance Sheet Problem’. Under the Twin balance sheet, we talk about the balance sheet of the Banks and that of the Corporates & the MSMEs," added the Finance Minister. 

The profit of public sector banks increased to Rs 1.04 lakh crore in 2022-23, tripling from what it was in 2014, the minister said.

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

"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 that it is a twin-balance sheet advantage that the Indian economy is benefiting from,", 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 the performance of public sector banks has improved on account of various initiatives the Modi government took since 2014. She added that there was an improvement in all critical parameters like return on asset, net interest margin, and provisioning coverage ratio.

 

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