Blitz Bureau
NEW DELHI: The net profit of public sector banks (PSBs) recorded a robust 11.1 per cent increase to scale an all-time high of Rs 1.98 lakh crore in FY 2025–26, marking the fourth straight year of profitability as reforms and strengthened governance practices have reinforced healthier balance sheets, enhanced operational resilience, and strong capital adequacy, the Finance Ministry said on May 12.
Improved asset quality, healthy credit expansion and higher income contributed to improved profitability of PSBs during FY 2025–26, a Finance Ministry statement said. The aggregate business of public sector banks (PSBs) increased to Rs 283.3 lakh crore as on March 31, 2026, registering a growth of 12.8 per cent over the previous year, it said.
Asset quality of PSBs improved significantly during FY 2025–26, with Gross NPA ratio (Non-Performing Assets) declining to 1.93 per cent and Net NPA ratio to 0.39 per cent as on March 31, 2026, reflecting historically low levels of stressed assets. Further, each PSB maintained a provisioning coverage ratio of above 90 per cent, indicating prudent provisioning practices, improved underwriting standards, effective risk management mechanisms and strengthened balance sheet resilience, the statement added.
Fresh slippages continued to decline during FY 2025–26, with the slippage ratio reducing to 0.7 per cent. Total recoveries, including recoveries from written-off accounts, stood at Rs 86,971 crore, reflecting improved recovery mechanisms and better credit discipline across PSBs. Aggregate deposits rose by 10.6 per cent year-on-year to Rs 156.3 lakh crore, reflecting continued depositor confidence and strong resource mobilisation by PSBs.
