Public sector banks achieve record profit of ₹1.98 lakh crore in FY26

The finance ministry has said that Public Sector Banks (PSBs) have achieved a record net profit of ₹1.98 lakh crore in FY 2025-26 (FY26), marking their fourth consecutive year of strong financial performance, supported by improved asset quality, healthy credit expansion and higher income.

According to the Ministry, aggregate operating profit of PSBs stood at ₹3.21 lakh crore during the fiscal year, while net profit rose 11.1% year-on-year. The aggregate business of PSBs increased to ₹283.3 lakh crore as on March 31, 2026, up 12.8% from the previous year. Aggregate deposits rose 10.6% year-on-year to ₹156.3 lakh crore, reflecting continued depositor confidence and strong resource mobilisation by PSBs. Gross advances increased 15.7% to ₹127 lakh crore, indicating sustained credit demand across secto₹of the economy.

It also said asset quality of PSBs improved significantly during FY26, with gross non-performing assets (NPA) ratio declining to 1.93% and net NPA ratio to 0.39% as on March 31, 2026, reflecting historically low levels of stressed assets. Further, all PSBs maintained a provisioning coverage ratio of above 90%, indicating prudent provisioning practices, improved underwriting standards, effective risk management mechanisms and strengthened balance sheet resilience.

Fresh slippages continued to decline during FY26, with slippage ratio reducing to 0.7%. Total recoveries, including recoveries from written-off accounts, stood at ₹86,971 crore, reflecting improved recovery mechanisms and better credit discipline across PSBs.