The profit of the country’s public sector banks has reached a record level in the financial year 2026.
Public sector banks (PSBs) have recorded the highest ever net profit of Rs 1.98 lakh crore in the financial year 2025-26. The Finance Ministry said on Tuesday that this is the fourth consecutive year when public sector banks have been profitable. If we look at the figures, in the last financial year, government banks have earned a profit of more than Rs 62 thousand every second. Which is a record. Let us also tell you what kind of reports have come out regarding the profits of government banks.
Government banks made record profits
According to the ministry, improvement in asset quality, healthy expansion of credit and growth in income contributed to the profitability of public sector banks during FY 2025-26. During this period, total operating profit reached Rs 3.21 lakh crore, while total net profit increased by 11.1 percent year-on-year to a historic high of Rs 1.98 lakh crore. The total business of public sector banks reached Rs 283.3 lakh crore by March 31, 2026, which shows an increase of 12.8 percent as compared to the previous year. Total deposits increased by 10.6 per cent year-on-year to Rs 156.3 lakh crore, a result of continued confidence of depositors and strong resource mobilization by banks.
Profit was made due to this
Total credit recorded an increase of 15.7 percent on annual basis and stood at Rs 127 lakh crore. This is an indication of continued demand for credit in various sectors of the economy. The ministry said in the statement that public sector banks continued to deliver strong financial performance during FY 2025-26, reflecting sustained business growth, improved asset quality, record profitability and strong capital position. The ministry further said that this improved performance proves the stability and enhanced institutional capacity of these banks to meet the credit requirements of the rapidly growing Indian economy.
Big decline in NPA also
The asset quality of public sector banks improved significantly during the financial year 2025-26. By March 31, 2026, the gross non-performing assets ratio declined to 1.93 percent and the net non-performing assets ratio to 0.39 percent, marking a historically low level of stressed assets. Additionally, the ministry said every public sector bank maintained a provisioning coverage ratio of more than 90 per cent, indicating prudent provisioning practices, good underwriting standards, effective risk management mechanisms and strong balance sheet flexibility. New slippages continued to decline during FY 2025-26, and the slippage ratio declined to 0.7 percent. Total recovery, including recovery from written-off accounts, stood at Rs 86,971 crore, reflecting better recovery mechanisms and better credit discipline in public sector banks.
