India’s public sector banks (PSBs) reported their strongest financial performance in FY 2025-26, with gross non-performing assets (GNPA) falling to a record low of 1.9%, while combined net profit climbed to an all-time high of ₹1.98 lakh crore, according to information shared by the Ministry of Finance.
The latest financial data shows that the aggregate business of PSBs expanded to ₹283.3 lakh crore as of March 31, 2026, reflecting continued growth in both deposits and lending. Total deposits increased to ₹156.3 lakh crore, while loans and advances reached ₹127.0 lakh crore, highlighting sustained credit demand across the economy.
The banking sector’s asset quality also continued to improve over the past five years. Gross NPAs declined from 7.3% in FY22 to 1.9% in FY26, while capital adequacy strengthened from 14.6% to 16.6%, indicating healthier balance sheets and stronger capital buffers.
Profitability has also risen steadily during the same period. Combined net profit of PSBs increased from ₹0.67 lakh crore in FY22 to ₹1.98 lakh crore in FY26, marking the highest annual profit recorded by the sector.
Credit growth remained broad-based across key segments during FY26. Retail loans registered 19.8% year-on-year growth, while MSME lending expanded by 19.6%. Agriculture and allied activities recorded 16.2% growth, and infrastructure lending increased 4.9%, reflecting continued financing support across multiple sectors of the economy.
The Ministry also highlighted measures introduced to strengthen credit availability. The Emergency Credit Line Guarantee Scheme (ECLGS 5.0), launched in May 2026, was designed to help businesses facing short-term liquidity challenges arising from the West Asia crisis. Under the scheme, eligible borrowers can access additional credit backed by guarantee cover through the National Credit Guarantee Trustee Company Limited (NCGTC).
For airlines, ECLGS 5.0 provides assistance covering up to 100% of peak credit outstanding during the fourth quarter of FY26. The maximum support available is ₹1,500 crore per borrower, with borrowing beyond ₹1,000 crore requiring proportionate equity contribution from promoters.
The financial performance figures and policy details were shared by Minister of State for Finance Pankaj Chaudhary in a written reply in the Rajya Sabha.
Source: This article is based on an official press release issued by the Press Information Bureau, Ministry of Finance, Government of India
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