Public sector banks (PSBs) in India have reported record-breaking financial performance in the first nine months (April-December) of the financial year 2024-25, according to the Finance Ministry. With a net profit growth of 31.3% year-on-year, PSBs have achieved their highest-ever aggregate net profit of ₹1,29,426 crore during this period.
Strong Financial Performance and Improved Asset Quality
The banks have also recorded an impressive operating profit of ₹2,20,243 crore, reflecting the sector’s financial strength and stability. Notably, asset quality has improved significantly, with the net non-performing assets (NPA) ratio dropping to just 0.59% of total loans. The total outstanding net NPAs have reduced to ₹61,252 crore, showcasing improved credit discipline and better risk management practices.
Robust Business and Credit Growth
Public sector banks have demonstrated an 11% year-on-year growth in total business, reaching ₹242.27 lakh crore. Deposits have grown by 9.8%, while credit expansion has been strong at 12.4%. The growth has been driven by key sectors, including:
Retail credit, which increased by 16.6%
Agriculture credit, which rose by 12.9%
MSME credit, which expanded by 12.5%
This credit expansion has played a key role in boosting economic activity and employment in the country.
Strong Capital Position and Policy Reforms
Public sector banks remain well-capitalized, with a capital-to-risk-weighted assets ratio (CRAR) of 14.83%, significantly above the regulatory requirement of 11.5%. This ensures their ability to meet credit demands across sectors, especially in agriculture, MSMEs, and infrastructure, which are crucial for economic growth and job creation.
Additionally, policy and process reforms have strengthened banking systems, enhancing credit discipline, stress asset resolution, responsible lending, governance, financial inclusion, and technology adoption. These improvements have contributed to the sustained financial health and resilience of the banking sector, reflected in the current strong performance of PSBs.
