As public sector banks (PSBs) continue to demonstrate resilience and strong asset quality improvement, Financial Services Secretary M Nagaraju has expressed confidence that the combined profit of these banks is expected to cross the landmark Rs 2 lakh crore mark at the end of ongoing financial year (FY26). Emphasizing that the Indian banking sector is in good shape, he said PSBs’ credit growth is at 12 per cent this year, which he described as tremendously good, while deposit growth at 10 per cent is also reasonably very good. 

He said ‘as I said, banks are at the bellwether for the strength of the economy. Therefore, they are resilient. We have very prudent management systems in place under the regulator RBI. So we are not much worried about the external factors negatively impacting our banking sector.’ He noted that the combined profit of PSBs would double in three years. The FY25 closed with PSU banks posting a record profit of Rs 1.78 lakh crore, up from Rs 1.41 lakh crore in FY24, a 26 per cent growth, on account of significant improvement in asset quality, credit growth, healthy capital adequacy ratio and rising return on assets.

Talking about the asset quality of PSBs, he said gross NPA is at record low of 2.30 per cent and net NPA at 3 per cent at the end of September 2025. Provisioning coverage ratio (PCR) improved to 94.63 per cent at the end of September 2025, while the capital adequacy ratio of PSBs stood at 15.96 per cent at the end of the first half of the current fiscal.