The Department of Financial Services (DFS) Secretary Shri M. Nagaraju chaired a review meeting evaluating the half-yearly performance of Public Sector Banks (PSBs) for FY 2025–26.
Key areas such as financial strength, asset quality, digital advancements and progress under flagship government schemes were thoroughly examined during the session held in New Delhi.
PSBs demonstrated continued growth with a cumulative net profit of ₹93,675 crore for H1 FY 2025–26, supported by consistent business expansion.
The banking sector’s aggregate business grew to ₹261 lakh crore as of September 2025, driven by a 12.3% year-on-year increase in advances and a 9.6% rise in deposits.
Gross Non-Performing Assets (GNPAs) fell to a multi-year low of 2.30%, while Net NPAs stood at 0.45%. The Return on Assets reached 1.08% and the cost of funds reduced to 4.97%, reflecting improved operational efficiencies.
The DFS Secretary emphasised the need to maintain strong momentum in credit flow, particularly to sectors like MSMEs and agriculture. Strengthening of risk management systems, underwriting standards and operational resilience were also prioritised.
Public Sector Banks were encouraged to focus on enhancing early warning systems and leveraging digital recovery platforms like BAANKNET.
PSBs showcased technological improvements across digital banking services and mobile platforms. These included enhanced user interfaces, multilingual support and transaction efficiency upgrades.
Banks were urged to adopt responsible AI and data analytics for customer service, while also building stronger cyber resilience and ensuring grievance redressal efficiency.
Significant discussions centred on schemes like PM Surya Ghar Muft Bijli Yojana, PM Vidya Lakshmi Yojana, and PM Vishwakarma Yojana including the implementation of JanSamarth digital lending platform.
Financial inclusion programmes like PMJDY, PMJJBY, PMSBY, and PM SVANidhi were reviewed, with directives for improved outreach, especially in underserved districts.
As aligned with the Viksit Bharat @2047 framework, PSBs detailed their credit expansion in champion sectors like renewable energy, green infrastructure, tourism, food processing and data centres.
Preparations for transitioning to the Expected Credit Loss (ECL) provisioning model were also reviewed.
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The H1 FY 2025–26 review underlined robust PSB performance with notable improvements in profitability, asset quality and digital transformation. Banks are set to continue their role in inclusive growth and sustainable credit deployment in key sectors as part of the Viksit Bharat roadmap.
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Published on: Dec 1, 2025, 2:56 PM IST
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