New Delhi, May 20 (IANS) Prime Minister Narendra Modi on Monday lauded the "remarkable" turnaround in the health of India’s banking sector as the cumulative net profit of all banks for the first time crossed Rs 3 lakh crore in 2023-24.

“When we came to power, our banks were reeling with losses and high NPAs due to the phone-banking policy of UPA. The doors of the banks were closed for the poor. This improvement in the health of banks will help improve credit availability to our poor, farmers and MSMEs (micro small and medium enterprises),” the Prime Minister said.

The RBI and prominent economists have also identified this strong health of India’s banking sector as one of the crucial drivers of the country’s high economic growth.

Earlier PM Modi had at an RBI function in Mumbai on April 1 said: “India’s banking system is strong and sustainable globally. The banking system which was once in loss is now in profit and credit has seen record growth.”

The Prime Minister credited clarity of policy, intentions and decisions for this transformation. “Where intentions are right, the results too are correct”, the Prime Minister remarked.

Speaking on the comprehensive nature of reforms, the Prime Minister stated that the government worked on the strategy of recognition, resolution and recapitalisation.

“A capital infusion of 3.5 lakh crore was undertaken for the helping public sector banks along with many governance-related reforms. Just the Insolvency and Bankruptcy Code has resolved loans amounting to 3.25 lakh rupees,” the Prime Minister pointed out.

He also informed the country that more than 27,000 applications involving underlying defaults of more than Rs 9 lakh crore were resolved even before admission under IBC.

Gross NPAs of banks that stood at 11.25 per cent in 2018 came down to below 3 per cent by September 2023. He said that the problem of twin balance sheets is a problem of the past.