More Stories

Informist, Tuesday, May 12, 2026

 

NEW DELHI – State-owned banks registered a strong financial performance during 2025–26 (Apr-Mar), with record high net profit and lowest ever bad loans, the finance ministry said Tuesday. The improved performance of public sector banks demonstrates the resilience, stability and enhanced institutional capacity in supporting the credit needs of a fast-growing Indian economy, the ministry said in a release. 

 

Public sector banks recorded an all-time high net profit of INR 1.98 trillion in FY26, marking the fourth straight year of profitability, the ministry said. The aggregate operating profit of these banks was INR 3.21 trillion in FY26.

 

The total business of public sector banks reached INR 283.3 trillion in FY26, up 12.8% on year. Gross advances of state-owned banks grew 15.7% on year to INR 127 trillion as on Mar. 31, with strong growth across retail, agriculture, and 'micro, small, and medium enterprises' segments. Aggregate deposits rose 10.6% on year to INR 156.3 trillion, reflecting continued depositor confidence and strong resource mobilisation by these banks, the ministry said. 

 

Asset quality improved significantly, with the gross NPA ratio declining to 1.93% and the net NPA ratio falling to 0.39% as of Mar. 31 – the lowest levels recorded historically. Each public sector bank maintained a provisioning coverage ratio of above 90%, indicating "prudent provisioning practices, improved underwriting standards, effective risk management mechanisms and strengthened balance sheet resilience," the ministry said. 

 

Fresh slippages continued to decline during FY26, with the slippage ratio decreasing to 0.7%. Total recoveries, including recoveries from written-off accounts, stood at INR 869.71 billion, reflecting improved recovery mechanisms and better credit discipline across these banks, the ministry said.

 

The capital position of public sector banks remained healthy, with aggregate capital to risk weighted assets ratio improving to 16.6% as on Mar. 31, supported by internal accruals, retained earnings and capital raising of INR 505.51 billion during FY26. The capital adequacy ratio of all state-owned banks remained well above the regulatory requirement of 11.5%, providing adequate cushion for continued lending growth, the ministry said. 

 

Operational efficiency of these banks also improved during the year, with the cost-to-income ratio improving to 49.67%, reflecting better cost management and gains from technology adoption and digital transformation initiatives, the release said.  End

 

Reported by Shubham Rana

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.