India's public sector banks (PSBs) have collectively reported a record net profit of Rs.1.78 lakh crore for the fiscal year ending March 2025, marking a 26% increase over the previous year's Rs.1.41 lakh crore. This significant growth underscores the sector's robust recovery from the Rs. 85,390 crore loss recorded in FY18.
Key Highlights:
- State Bank of India (SBI): Contributed over 40% of the total PSB profits, posting a net profit of Rs.70,901 crore in FY25, up 16% from Rs.61,077 crore in FY24.
- Punjab National Bank (PNB): Achieved the highest percentage growth among PSBs with a 102% increase, recording a net profit of Rs. 16,630 crore.
- Other Notable Performers:
- Punjab & Sind Bank: Profit rose by 71% to Rs.1,016 crore.
- Central Bank of India: 48.4% increase to Rs.3,785 crore.
- UCO Bank: 47.8% rise to Rs.2,445 crore.
- Bank of India: 45.9% growth to Rs.9,219 crore.
- Bank of Maharashtra: 36.1% increase to Rs.5,520 crore.
- Indian Bank: 35.4% rise to Rs.10,918 crore.
Contributing Factors:
The remarkable turnaround of PSBs is attributed to comprehensive reforms and strategic initiatives implemented by the government, including:
4R Strategy: Recognizing non-performing assets (NPAs), Resolution and recovery of troubled assets, Recapitalization of banks, and Reforms in governance and operations.
Recapitalization Efforts: Between FY17 and FY21, the government infused Rs.3.11 lakh crore into PSBs to strengthen their capital base.
Structural Reforms: Measures such as bank amalgamations, adoption of digital banking practices, improved lending discipline, and enhanced governance frameworks have contributed to the improved financial health of PSBs.
This record profitability indicates a robust and resilient public banking sector, poised to contribute significantly to India's economic growth.