Prime Minister Narendra Modi on Monday praised the banking sector for crossing Rs 3 lakh crore for the first time in FY24.

Taking to X, the Prime Minister said, “In a remarkable turnaround in the last 10 years, India’s banking sector net profit crosses Rs 3 lakh crore for the first time ever.”

“When we came to power, our banks were reeling with losses and high NPAs due to the phone-banking policy of UPA. The doors of the banks were closed for the poor.”

“This improvement in the health of banks will help improve credit availability to our poor, farmers and MSME,” he added.

Notably, in absolute terms, the private sector banks reported a bigger net profit than PSBs. In FY24, a total of 26 private sector banks reported a net profit of Rs 1.78 lakh crore versus the 12 PSBs’ net profit of Rs 1.41 lakh crore.

Experts have maintained that the increase in profit is largely due to the banks maintaining high credit growth, resulting in an increase in net interest income.

The lenders also kept their asset quality under control, reporting a healthy bad loan book in FY24. It must be highlighted that among private sector banks, HDFC Bank reported the highest profit of Rs 60,812 crore in FY24. While among the PSBs, the country’s largest bank, the State Bank of India (SBI), reported a net profit of Rs 61,076 crore.

In the previous financial year, private banks’ total profit was at Rs 1.26 lakh crore and PSBs’ total profit was at Rs 1.04 lakh crore.

On a year-on-year basis, private banks’ profit jumped by 41 per cent and PSB’s net profit jumped by 35 per cent. Except UCO Bank and Punjab & Sind Bank, all banks reported a jump in their net profit on a YoY basis.

UCO Bank’s net profit dipped to Rs 1,653 crore in FY24 from Rs 1,862 crore in FY23, while Punjab & Sind Bank’s net profit plummeted to Rs 595 crore in FY24 from Rs 1,313 crore in FY23.

In the last quarter of FY24, banks reported a better-than-expected Net interest margin (NIM) but some concerns still remain on the high volume of bad loans for some banks.

On the asset quality front, among the top PSBs, Union Bank of India reported a gross non-performing asset (GNPA) of 4.76 per cent and net NPA (NNPA) of 1.03 per cent against 7.53 per cent and 1.70 per cent respectively, last year.