India's Public Sector Banks Report Record Profits for FY 2025-26

The Ministry of Finance reported that India's public sector banks (PSBs) achieved a record combined net profit of Rs 1.98 lakh crore in FY 2025-26. Gross Non-Performing Assets (GNPA) fell to a multi-decadal low of 1.9 per cent, while aggregate business exceeded Rs 283 lakh crore. Growth was driven by increases in retail lending, MSME lending, and agriculture sector credit. Regional Rural Banks (RRBs) also reached an all-time high consolidated net profit of Rs 10,177 crore, with NPAs dropping to 5.3 per cent.

Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha that the government launched the Emergency Credit Line Guarantee Scheme (ECLGS 5.0) in May 2026 to mitigate liquidity challenges caused by the West Asia crisis, providing credit support capped at Rs 2,55,000 crore.

On customer services, Chaudhary noted that 10 of 12 PSBs have discontinued penal charges for savings accounts to promote inclusive banking. Despite this, PSBs collected Rs 2,137.92 crore in penalties for non-maintenance of minimum average balances in FY26, with State Bank of India recording the highest PSB charge at Rs 477.27 crore for current accounts. For comparison, private sector lenders collected Rs 4,948.71 crore, led by HDFC Bank and Axis Bank.