ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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POLITICS-Congress Game

from a net profit of Rs 270.57 crore to a net loss of Rs 1,122.23 crore, the number of loss-making banks has declined from 12 in 1994-95 to seven in 1995-96 and the bulk of the loss, of as much as Rs 1,336 crore is attributable to a single bank (Indian Bank) due to a series of irregularities. The banks' non-performing assets ratios have come down. Also, only eight of the 27 public sector banks have failed to fulfil the required 8 per cent capital adequacy norm. But, as pointed out above, these improvements have been secured at a heavy cost to the exchequer and the economy. Further, it does not also appear that these improvements will be enduring; in fact all indications are that 1996-97 will be yet another year of deteriorating performance. Also, their financial performance apart, the persistent reluctance of the public sector banks to engage in normal lending activity will be damaging to the growth of the economy. Even their performance in terms of their priority sector lending as a proportion of their total advances is exaggerated because of the slow growth of the latter.

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