The finance ministry has summoned the heads of public sector banks (PSBs) for a meeting on May 29 to assess credit flow to the agriculture and MSME sectors, financial performance, and banking operations amid the ongoing Middle East crisis, according to PTI. The meeting will be chaired by Financial Services Secretary M Nagaraju, a day before his retirement.
Agenda and Discussions
Sources indicate that the review meeting will also cover the functioning and financial performance of regional rural banks (RRBs), progress on the Jan Samarth portal, artificial intelligence-related issues, and digital frauds. Additionally, deliberations will focus on recovery mechanisms and progress under debt recovery tribunals (DRTs) and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.
Record Financial Performance
The meeting follows state-owned banks posting a record combined net profit of Rs 1.98 lakh crore in FY26, marking the fourth consecutive year of profitability for PSBs. Improved asset quality, credit growth, and higher income drove earnings during the year. Aggregate operating profit of PSBs stood at Rs 3.21 lakh crore, while net profit rose 11.1 per cent year-on-year to Rs 1.98 lakh crore.
Business Growth
The total business of PSBs increased by 12.8 per cent to Rs 283.3 lakh crore as of March 31, 2026. Aggregate deposits rose 10.6 per cent to Rs 156.3 lakh crore, while gross advances grew 15.7 per cent to Rs 127 lakh crore, reflecting sustained credit demand across sectors.
Asset Quality Improvement
Asset quality also saw significant improvement, with the gross non-performing assets (NPA) ratio declining to 1.93 per cent and the net NPA ratio falling to 0.39 per cent at the end of FY26. Fresh slippages declined further during the year, with the slippage ratio reducing to 0.7 per cent. Total recoveries, including written-off accounts, stood at Rs 86,971 crore.
