Govt Banks mint record profit of 1.98 lakh crores in FY25-26

Public Sector Banks (PSBs) in India have scripted a new chapter in financial history by achieving an all-time high net profit of ₹1.98 lakh crore for the fiscal year 2025-26. This stellar performance marks the fourth consecutive year of profitability for state-owned lenders, underscoring a period of sustained business growth and institutional resilience. The record earnings highlight the enhanced capacity of these banks to support the credit requirements of a rapidly expanding Indian economy while maintaining a rock-solid capital position.

The total business of PSBs reached a significant milestone of ₹283.3 lakh crore as of March 31, 2026, representing a robust 12.8% year-on-year growth. This expansion was fueled by a 15.7% surge in advances, which reached ₹127 lakh crore, reflecting strong credit demand across various economic sectors. Specifically, the Retail, Agriculture, and MSME segments showed impressive growth rates of 18.1%, 15.5%, and 18.2%, respectively, proving that the credit boom is broad-based and reaches the grassroots level of the economy.

A defining feature of this fiscal year's performance is the dramatic improvement in asset quality. The Gross Non-Performing Assets (NPA) ratio for PSBs fell to a historic low of 1.93%, while the Net NPA ratio dropped significantly to 0.39%. Furthermore, every public sector bank maintained a Provisioning Coverage Ratio (PCR) of over 90%, indicating a highly effective risk management framework and a fortress-like balance sheet capable of absorbing future shocks.