Public Sector Banks Outpace Private Banks in Credit Expansion

Written by: Neha DubeyUpdated on: 15 Oct 2025, 9:37 pm IST

Public sector banks lead in credit growth, driven by stronger processes, trust, and MSME-focused initiatives, says DFS Secretary M Nagaraju.

India’s public sector banks (PSBs) have shown remarkable resilience and growth, surpassing private banks in credit expansion, according to Financial Services Secretary M Nagaraju,as per The Economic Times report.

Highlighting improvements in lending practices, customer trust, and MSME support, he emphasised that PSBs are regaining their leadership role in the banking ecosystem.

PSBs Regain Momentum

Financial Services Secretary M Nagaraju underscored the renewed strength of public sector banks, noting that their credit growth has outperformed private banks in recent times.

This surge, he explained, reflects the sector’s improved due diligence, stronger credit underwriting standards, and better monitoring of project loans elements that have strengthened the overall financial system.

Boosting MSMEs and Startups

Speaking at the inauguration event Nagaraju called on banks to extend greater financial support to MSMEs and startups, describing them as the “true engines” of India’s economic growth.

He emphasised the importance of maintaining dignity in customer service and ensuring that both digital and in-branch experiences remain seamless, inclusive, and resilient.

Conclusion

The recent trends highlight a positive shift for India’s public sector banks, with stronger credit growth, improved operational standards, and targeted MSME support initiatives.

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Published on: Oct 15, 2025, 4:06 PM IST

Neha Dubey

Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.

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