The net profit of public sector was Rs 32,689 crore in the corresponding quarter of 2010-11, Finance Minister Pranab Mukherjee said in a reply in the Rajya Sabha.
"The main reason for decline in profit after tax of Public Sector Banks...is higher provision on account of moving to system generated Non-Performing Assets (NPAs) through Core Banking System (CBS) and high exposure in stressed assets of certain sectors like textile, telecom, aviation, steel and power," Mukherjee said.
However, net profit of private sector banks in the December quarter rose 28.79 per cent from the same period a year ago, he said. Mukherjee added that operating profit of PSBs at the end of the December quarter of this fiscal stood at Rs 83,000 crore against Rs 73,000 crore in the corresponding period.
In a separate written reply to the House, Minister of State for Finance Namo Narain Meena said public sector banks have advanced a total of Rs 1.54 lakh crore to the textile sector as of January 27, 2012. He added that as of March 31, 2010, the total outstanding credit of PSU banks for textile sector was Rs 1.15 lakh crore.
Meena added that the RBI was examining a proposal from the Textile Ministry for restructuring of these loans. "RBI has opined that banks can restructure any account and if such restructuring is done within RBI laid down framework, certain assets classification benefits are available to banks. However, banks are free to restructure accounts outside RBI`s framework and in such cases, the asset classification benefit will not be available," Meena said.