Loan disbursal has increased from 3% in March 2020 to 4.6% in September 2021 for PSU banks. This is great sign for the sector that is coming out of pandemic situation. Credit bureau study indicates that the share of personal loans for PSU banks rose from 8% in March 2020 to 26% in August 2020. The situation is getting far better with the opening of the economy.
From last 5 years, the sector is under tremendous pressure due to rising NPA issue and rising frauds by many entrepreneurs. Also Government policy to meet fiscal expenditure by selling its stake always put pressure on the stock prices of these PSU banks.
RBI is now taking lot of steps to improve the financial position of these banks. This means that in long run these banks have great future and also with the opening of the economy the lending of these banks to various sectors will improve further. This will add revenue for these banks and also lead to improvement of NPA situation for these banks.