Journalism of Courage
Big improvement in PSBs’ financial health, profits at historic highs: Finance Ministry
The net profit of public sector banks was Rs 1.98 lakh crore in 2025-26, up 11% from 2024-25. Since 2021-22, PSBs’ profits have almost tripled.
In 2025-26, loan growth was 16%. Over four years, PSBs have increased their lending by 71%.
Public sector banks are in good health and have seen an improvement in their key metrics, including profits which are at all-time highs, while bad loans are the lowest in several decades, the Ministry of Finance informed the Parliament on Tuesday.
“The financial health of Public Sector Banks (PSBs) have shown significant improvement with healthy balance sheets, historically high profits and multi-decadal low level of gross non-performing assets (GNPAs). Further, PSBs have recorded sustained credit growth across different sectors of the economy,” Minister of State for Finance Pankaj Chaudhary said in a written response to a question in the Rajya Sabha.
According to data provided by Chaudhary in his reply, the net profit of the country’s PSBs stood at Rs 1.98 lakh crore in 2025-26, up 11% from 2024-25. Since 2021-22, PSBs’ profits have almost tripled, the data showed.
The trend was similar for loans and deposits. In 2025-26, loan growth was 16%. Over four years, PSBs have increased their lending by 71%.
However, deposits have not kept pace. While they rose 10% in the last fiscal, the growth over March 2022 was 46%, significantly lower than the loan growth.
Within loans, retail and MSME segments have led the charge, both posting year-on-year increases of almost 20%. Farm loans were slightly behind at 16.2%. However, infrastructure loans to industries lagged and were up only 4.9% year-on-year as at the end of 2025-26.
In response to a separate question on Tuesday on the performance of Regional Rural Banks (RRBs), Chaudhary said these banks posted a record profit of Rs 10,177 crore in 2025-26, up a massive 49% from 2024-25. However, like PSBs, deposit growth for RRBs lagged loan growth: 7.7% versus 10.3%.
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“RRBs have also shown consistent improvement in key financial parameters like Capital to Risk Weighted Asset Ratio (CRAR), deposits, advances, Non-Performing Asset (NPA), Credit-Deposit Ratio (CD ratio) etc,” the MoS said, adding that the government regularly reviews the progress made by these banks in deepening financial inclusion in rural and remote areas.
Data provided by Chaudhary in response to another question showed the 12 PSBs earned Rs 12,033 crore from their customers from 2021-22 to 2025-26 for non-maintenance of Minimum Average Balance in current and savings accounts. Private banks, meanwhile, earned Rs 15,940 crore over 2022-23 to 2025-26.
No penal charges are levied by banks on Basic Savings Bank Deposit Accounts, including Jan Dhan accounts.
PSBs also earned Rs 28,368 crore from 2021-22 to 2025-26 as Annual Maintenance Charges for debit cards. Comparative data for private banks was not provided.
© The Indian Express Pvt Ltd
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