How has the total business of public sector banks surged to Rs 251 lakh crore in 2024-25?
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Synopsis
Public sector banks have seen remarkable growth, with total business skyrocketing to Rs 251 lakh crore by FY 2024-25. This growth is accompanied by significant improvements in net profit and a reduction in NPAs. Finance Minister Nirmala Sitharaman's recent review meeting highlights the banks' solid performance and ongoing initiatives to enhance financial inclusion and agricultural credit.
Key Takeaways
- Total business of public sector banks rose to Rs 251 lakh crore.
- Net NPAs dropped to 0.52 percent.
- Net profit increased to Rs 1.78 lakh crore.
- Focus on enhancing financial inclusion.
- Expansion of agricultural credit initiatives.
New Delhi, June 27 (NationPress) The total business of public sector banks has increased significantly from Rs 203 lakh crore in FY 2022–23 to Rs 251 lakh crore in FY 2024–25. During this period, the net non-performing assets (NPAs) have dropped from 1.24 percent to 0.52 percent, as reported to Finance Minister Nirmala Sitharaman at the annual review meeting with bank executives.
The net profit of public sector banks has also seen a rise from Rs 1.04 lakh crore to Rs 1.78 lakh crore, while dividend payouts have escalated from Rs 20,964 crore to Rs 34,990 crore in the same timeframe.
The Finance Minister was informed that public sector banks are well-capitalized, with a capital adequacy ratio of 16.15 percent as of March 2025.
She assessed the performance of public sector banks across critical areas, focusing on financial resilience, inclusive lending, cybersecurity, and customer-oriented innovation.
Sitharaman emphasized the importance of ongoing efforts to enhance deposit mobilization to sustain credit growth. Public sector banks were encouraged to conduct special initiatives, effectively utilize their branch networks, and enhance outreach in semi-urban and rural regions.
Banks were advised to intensify their efforts under key financial inclusion initiatives, such as PM MUDRA Yojana, PM Vishwakarma, PM Surya Ghar Muft Bijli Yojana, PM Vidyalaxmi, and the Kisan Credit Card (KCC) scheme.
As outlined in the Union Budget 2025-26, public sector banks were motivated to concentrate on agricultural credit in the 100 districts identified under the PM Dhan Dhanya Yojana. They were instructed to develop specialized credit products aimed at boosting agricultural productivity and unlocking local economic potential by identifying and supporting viable farm products.
Banks were further encouraged to broaden their footprint in GIFT City to align with India’s goals in international financial services, capitalize on emerging global opportunities, and enhance participation in the India International Bullion Exchange (IIBX).
Sitharaman directed public sector banks to actively engage in the upcoming 3-month Financial Inclusion saturation campaign, commencing on July 1, covering 2.7 lakh Gram Panchayats and Urban Local Bodies.
She was updated on the progress of the New Credit Assessment Model for MSMEs, launched on March 6, 2025, with 1.97 lakh MSME loans sanctioned, totaling Rs 60,000 crore. Banks were instructed to reinforce the implementation of this model to improve access to capital and expedite credit flow to small and medium enterprises.
Additionally, it was highlighted during the meeting that under the Stand Up India scheme, 2.28 lakh loans have been approved, amounting to Rs 51,192 crore.
Point of View
It's vital to acknowledge the robust progress of public sector banks in India. Their ability to enhance profitability while reducing non-performing assets demonstrates resilience and effective management strategies. This growth not only reflects positively on the banking sector but also has significant implications for financial inclusion and economic development across the nation.
NationPress
27/06/2025
Frequently Asked Questions
What was the total business of public sector banks in FY 2022-23?
The total business of public sector banks was Rs 203 lakh crore in FY 2022-23.
What is the projected total business for FY 2024-25?
The total business of public sector banks is projected to reach Rs 251 lakh crore in FY 2024-25.
What was the reduction in NPAs during this period?
Net non-performing assets (NPAs) decreased from 1.24 percent to 0.52 percent.
How much profit did public sector banks report?
Public sector banks reported a net profit increase from Rs 1.04 lakh crore to Rs 1.78 lakh crore.
What initiatives are banks focusing on for financial inclusion?
Banks are focusing on initiatives like PM MUDRA Yojana, Kisan Credit Card scheme, and others to enhance financial inclusion.
