India’s public sector banks (PSBs) have reported a record cumulative net profit of ₹1.78 lakh crore for the fiscal year FY2024-25, marking a 26% year-on-year (YoY) growth. This milestone reflects the sector’s turnaround from losses in FY18, driven by government-led reforms and recapitalization efforts.
Financial Highlights
- State Bank of India (SBI) led the sector, contributing over 40% of total PSB earnings, with a net profit of ₹70,901 crore, up 16% YoY.
- Punjab National Bank (PNB) recorded the highest percentage growth, with a 102% rise in net profit to ₹16,630 crore.
- Punjab & Sind Bank posted a 71% increase, reaching ₹1,016 crore.
- Central Bank of India saw a 48.4% profit growth to ₹3,785 crore, while UCO Bank recorded a 47.8% rise to ₹2,445 crore.
- Bank of India registered a 45.9% increase, with net profit at ₹9,219 crore.
- Bank of Maharashtra and Indian Bank posted 36.1% and 35.4% growth, respectively.
Government-Led Reforms Driving Growth
The turnaround of PSBs is attributed to the government’s 4R strategy:
- Recognizing NPAs transparently.
- Resolution and recovery of stressed assets.
- Recapitalizing PSBs.
- Reforming the financial ecosystem.
Between FY17 and FY21, the government infused ₹3.10 lakh crore into PSBs under its recapitalization plan, strengthening balance sheets and preventing defaults. Additionally, reforms such as responsible lending, improved governance, digitization, and bank consolidation have contributed to the sector’s resurgence.
Market Outlook
With strong profitability and improved asset quality, PSBs are expected to continue their growth trajectory, supported by government initiatives and economic expansion.
