MumbaiIndia’s largest bank posted ₹19,684 crore Q4 profit.
Gross bad loans fell to 1.49% of advances from 1.82%, the bank’s regulatory filing showed.
Shares fell nearly 6% on the Bombay exchange; the bank declared a ₹17.35 dividend per share payable June 4.
Sources: Rediff.com India Ltd.
WHAT AN NPA IS
A non-performing asset is a loan where the borrower has missed payments for 90 days or more. Indian banks classify these in tiers — substandard, doubtful, loss — each requiring progressively larger provisions set aside against the loan's face value.
THE TWIN BALANCE SHEET CRISIS
From 2013 to 2018, Indian banks — especially public-sector ones — were buried under bad loans from infrastructure and steel projects approved during the 2003-2008 boom. Gross NPAs across the system peaked above 11% in 2018. SBI alone carried over ₹2 lakh crore in stressed assets at the peak.
WHY THE STATE OWNS THE BANKS
Indira Gandhi nationalised 14 major private banks in 1969 and six more in 1980, arguing private banks had ignored agriculture, small industry, and the poor. SBI itself traces back to the Bank of Calcutta (1806) — nationalised in 1955 as the chosen instrument of state-led development. Today public-sector banks still hold roughly 60% of all deposits.
THE IBC REVOLUTION
India had no functional bankruptcy law until 2016. Defaulting promoters could stall recovery for a decade. The Insolvency and Bankruptcy Code imposed a 330-day resolution deadline and — crucially — barred defaulting owners from buying back their own assets at a discount. This is the single biggest reason NPAs have fallen.
WHY SHARES FELL ON GOOD NEWS
Indian bank stocks have run up sharply on the asset-quality recovery story. With NPAs already near multi-decade lows, the upside from further cleanup shrinks — the next leg of earnings has to come from credit growth and net interest margins, both of which compress when the RBI cuts rates. Beating on profit while missing on margins is a textbook 'good but not good enough' print.