Public sector banks opened 7,840 new branches during 2013-14

FM P. Chidambaram holding the annual performance review meeting with the CEOs of PSBs in New Delhi on May 13

IN A bid to achieve the objective of financial inclusion public sector banks opened over 10,000 new branches during 2013-14, which is a new record for the government-owned lenders. This was informed by finance minister P Chidambaram chairing what is likely his last meeting...
with the heads of public sector banks and financial institutes on May 13 in New Delhi. The meeting was called to review annual performance of public sector banks and financial institutions for 2013-14.
The annual results of 19 PSBs which have been declared so far were analysed at the meeting.
The banks have opened more than 10,000 branches during 2013-14 which is the highest ever. Out of that, PSBs alone have opened 7,840 branches in the country in 2013-14, a major improvement from the average 4,000-4,500 branches that they normally open every year. Moreover, banks have set-up more than 25,000 on-site ATMs which is two and a half times the 10,000 ATMs that they usually set-up every year. Besides it, more than 15,000 ATMs have been opened off-site and thus, more than 40,000 ATMs have been opened during 2013-14.
As against the stated target of 40 percent adjusted net bank credit (ANBC), the PSBs have done priority sector lending (PSL) to the extent of 37 percent of ANBC. The number of students availing education loan has gone up to 25.72 lakh accounts with a credit outstanding of Rs.58,265 crore.
The finance minister said: “The last financial year was a difficult year even though there was positive movement towards greater stability. The finance minister expressed the need for structural reforms to tackle the problems of inflation especially food inflation which can’t be tackled through fiscal and monetary policies alone.”
He said that tough measures need to be taken against willful defaulters adding that the position that ‘promoter is prosperous but company is sick’ is not acceptable, said an official release.
The FM asked the banks to form a consortium and take joint action against such defaulters.
Namo Narain Meena, minister of state for finance, Dr. Gurdial Singh Sandhu, secretary, department of financial services (DFS), Ms Snehlata Shrivastava, additional secretary, DFS, CEOs and CMDs of PSBs and financial institutions(FIs) along with other senior officials of the ministry attended the meeting.
Issues related to non-performing assets (NPAs) of PSBs and measures for prevention of new accretion to NPAs were discussed, said the statement.
Some of the key issues discussed during the meeting are flow of credit to the agriculture sector including priority sector lending, education loans, minority lending, MSME credit.
In addition, issues related to stalled projects, new projects having a bearing on the functioning of PSBs and progress on financial inclusion were also discussed.
The slowing down of the economy has impacted the results of the banks.  Year on year Deposit growth of 19 PSBs as on 31st March, 2014 was 11.43 percent and advances growth was 10.69 percent. Gross NPAs had increased and net profit had decreased vis-a-vis the performance reported in 2012-13.
The Government is likely to infuse additional capital of up to ₹8,000 crore in public sector banks in the current fiscal to expand their capital base.
“Rs 11,200 crore, that is the provision we have made (in interim budget), although there was higher requirement and the balance which can be Rs 6,000-8000 crore,” said financial services secretary GS Sandhu after the meeting. The decision in this regard, however, is expected to be taken by the new Government.
The Government infused Rs 14,000 crore in public sector banks during the financial year ending March 31, 2014. Of this, the State Bank of India got Rs 2,000 crore, while Indian Overseas Bank received Rs 1,200 crore.
According to the Reserve Bank, Indian lenders will require additional capital of Rs 5 lakh crore to meet the new global banking norms, Basel III.