Public Sector Banks (PSBs) continued to register strong financial performance during FY25-26, reflecting sustained business growth, improved asset quality, record profitability and strong capital position.
The aggregate business of PSBs increased to Rs 283.3 lakh crore as on 31 March, 2026, registering growth of 12.8 per cent over the previous year, as per the statement issued by Finance Ministry.
Aggregate deposits rose by 10.6 per cent y-o-y (YoY) to Rs 156.3 lakh crore, reflecting continued depositor confidence and strong resource mobilisation by PSBs.
Gross advances registered growth of 15.7 per cent YoY and reached Rs 127 lakh crore, indicating sustained credit demand across sectors of the economy, the statement added.
It further highlighted that the credit growth in the Retail, Agriculture and MSME (RAM) segments remained broad based during FY25-26. Retail, Agriculture and MSME advances grew by 18.1 per cent, 15.5 per cent and 18.2 per cent, respectively, reflecting the important role of PSBs in supporting entrepreneurship, strengthening financial inclusion and enabling broad-based economic growth.
Asset quality of PSBs improved significantly during FY25–26, with Gross NPA ratio (Non-Performing Assets) declining to 1.93 per cent and Net NPA ratio to 0.39 per cent as on 31 March, 2026, reflecting historically low levels of stressed assets.
Further, each PSB maintained provisioning coverage ratio of above 90 per cent, indicating prudent provisioning practices, improved underwriting standards, effective risk management mechanisms and strengthened balance sheet resilience.
According to the statement, the fresh slippages continued to decline during FY25-26, with 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.
Meanwhile, the capital position of PSBs remained healthy, with aggregate CRAR (Capital to Risk (Weighted) Assets Ratio) improving to 16.6 per cent as on 31 March 2026, supported by internal accruals, retained earnings and capital raising of Rs 50,551 crore during FY25-26.
The CRAR of all PSBs remained well above the regulatory requirement of 11.5 per cent, providing adequate cushion for continued lending growth.
