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VRS, NPA-recovery improved banks' show

The Reserve Bank of India has said the significant improvement in the performance of the commercial banks in the last three years was mainly due to the sustained efforts to recover the non-performing assets, reduction staff expenses through voluntary retirement scheme and close monitoring of restructuring plans of the banks.

In its report on 'Trend and Progress of Banking in India for the year 2001-02',the apex bank said, Indian banking system continued to respond pro-actively to the challenges in its operating environment and performed considerably better in terms of both operating and net profits.

The improvement in net profits, notwithstanding increased provisions and contingencies, was largely due to increased profit from treasury management operations in the soft interest rate scenario and the containment in operating expenses.

While, income of the scheduled commercial banks witnessed an increase of 14.4 per cent, driven largely by 'other income', the expenditure was by and large contained on account of the lower operating expenses, resulting from the decline in wage costs, it said.

UNI

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