Indian economy has moved away from twin-balance sheet problem: Sitharaman

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

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 while inaugurating the corporate office of Punjab & Sind Bank in New Delhi. The twin-balance sheet problem refers to deterioration in financial health of banks and corporates at the same time.

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“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 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 have improved on account of various initiatives taken by the Modi government since 2014. There was an improvement in all critical parameters like return on asset, net interest margin and provisioning coverage ratio, she added.

(With agency inputs)