Page 505 - ES 2020-21_Volume-1-2 [28-01-21]

132 Economic Survey 2020-21 Volume 1

from 10.75 per cent to 9.96 per cent during the same period. Net NPA ratios also declined and
stood at 2.1 per cent for SCBs and 2.85 per cent for PSBs as at end- September 2020.

4.22 Capital to risk-weighted asset ratio (CRAR) of SCBs increased from 14.7 per cent to 15.8
per cent between March 2020 and September 2020 on account of improvement of improvement
of CRAR of both Public and Private sector banks. SCBs’ annualised Return on Assets (RoA)
recovered from 0.07 per cent to 0.64 per cent during first half (H1) of 2020-21, while their
annualised Return on Equity (RoE) recovered from 0.78 per cent to 7.68 per cent during the
same period. The RoA and RoE for PSBs became positive in June 2020 and continued to be
positive in the quarter ended September 2020, after recording negative profitability ratios from
March 2016 to March 2020 (Table 3). This is mainly on account of moratorium granted and
asset classification stand still order by the Supreme Court.
Table 3: NPAs, CRAR, RoE, RoA of Public Sector Banks and Private Sector Banks
(Amount in ` crore; Rates and Ratios in Per cent)
Public Sector Banks Private Sector Banks
Reporting Capital Return Return Capital Return Return
Date Gross Ratio on on Total Gross Ratio on on Total
NPAs NPAs
(CRAR) Equity Assets (CRAR) Equity Assets
Mar-17 6,84,732 12.14 -1.92 -0.12 91,915 15.53 11.79 1.27

Mar-18 8,95,601 11.66 -14.01 -0.87 1,25,863 16.43 9.98 1.09
Mar-19 7,39,541 12.20 -10.97 -0.66 1,80,872 16.07 5.49 0.60
Mar-20 6,78,317 12.85 -3.92 -0.25 2,05,848 16.55 3.20 0.35
Sep-20 6,09,129 13.51 4.33 0.26 1,88,191 18.21 10.04 1.10

Source: Offsite Returns, Global Operations, RBI
4.23 The net profit (profit after tax) for PSBs increased from ` (–) 25,941 crore at end-March
2020 to ` 14,688 crore at end-September 2020. Similarly, the net profit (profit after tax) for
private sector banks increased from ` 19,113 crore at end-March 2020 to ` 32,762 crore at end-
September 2020. Overall, for SCBs, the net profit (profit after tax) increased from ` 11,322 crore
at end-March 2020 to ` 59,426 crore at end-September 2020.
4.24 The focus on resolution of stressed assets had to take a backseat during the year on account
of the outbreak of the Covid-19 pandemic. Government had suspended the initiation of fresh
insolvency proceedings under Section 7, 9 and 10 of Insolvency & Bankruptcy Code 2016 for
defaults arising on or after March 25, 2020 till March 25, 2021. Reserve Bank announced loan
moratorium from March 1, 2020 to August 31, 2020, asset classification dispensation and special
resolution framework for Covid-19 related stressed assets. In respect of borrowers to whom
moratorium was granted, the period during which such facilities were granted was permitted
to be excluded from the calculation of days past due for the purpose of asset classification or
out of order status, as the case may be. Further, RBI announced a Resolution Framework for
COVID-19-related Stress to enable the lenders to implement a resolution plan in respect of
eligible corporate exposures without change in ownership, and personal loans, while classifying
such exposures as Standard, subject to certain conditions. Under the resolution plans that could
be invoked under the above window, lenders are permitted to grant additional moratorium of up
to two years. RBI had appointed a committee under K.V. Kamath for making recommendations