Question : DECLINE OF PROFIT OF COMMERCIAL BANKS



(a) whether it is a fact that after a gap of 04 quarters, 36 listed commercial banks recorded a 6.58 per cent decline in net profits in the second quarter of 2004-05; and

(b) if so, the details and reasons therefor?

Answer given by the minister


minister of state in the ministry of finance (shri s.s. palanimanickam)

(a) & (b) : Yes, Sir. There has been a decline in net profit in last 6 quarters in respect of 38 listed commercial banks. The details are given below:

FY	Period	PAT during the quarter	Net increase/decrease	%increase /decrease	from previous quarter	from previous	quarter 
03-04 Jun-03 3953.90 412.17 11.64
Sep-03 4495,91 542.01 13.71
Dec-03 4269.34 -226.57 -5.04
Mar-04 4855.84 586.50 13.74
04-05 Jun-04 4675.07 -180.77 -3.72

Sep-04 4075.59 -599.48 -12.82



The decline in profits is due to various reasons like decline in net-interest income or non-interest income, increase in operating expenses or higher provisioning and write offs, fall in income from securities trading and higher tax provisioning.