(THE NEWSMAN OF INDIA.COM) “SUNDAY SPECIAL” by Abul Hasan: Public Sector Banks (PSBs) in India have demonstrated an exceptional financial performance in the first nine months (April-December) of FY 2024-25, achieving their highest-ever aggregate net profit of ₹1.29 lakh crore. This marks an impressive 31.3% year-on-year growth, reinforcing their strong financial health and operational efficiency.

The stellar performance of PSBs is driven by robust business growth, improved asset quality, and adequate capital buffers, reflecting their strengthened fundamentals. This surge in profitability highlights the sector’s resilience, strategic reforms, and effective risk management, positioning PSBs as key contributors to India’s economic momentum. As they continue this upward trajectory, their role in driving financial inclusion and economic expansion remains crucial.

Record net profit growth of 31.3% (y-o-y) to achieve highest ever aggregate net profit of Rs. 1,29,426 Crore and aggregate operating profit of Rs. 2,20,243 Crore, in first nine months of the financial year. Improved asset quality visible from significantly low Net NPA ratio at 0.59% (Aggregate net NPA outstanding of Rs. 61,252 Crore) Aggregate business growth of 11.0% (y-o-y), with improved aggregate deposit growth at 9.8% (y-o-y). Total aggregate business of PSBs reached Rs. 242.27 lakh crore. Robust credit growth of 12.4%, led by retail credit growth of 16.6%, agriculture credit growth of 12.9% and MSME credit growth of 12.5%. Built-up of adequate capital buffers, with Aggregate Capital to Risk Weighted Assets Ratio of 14.83%, significantly above the minimum requirement of 11.5%.

PSBs are adequately capitalized and well poised to meet credit demands of all sectors of the economy, with special thrust on Agriculture, MSME and Infrastructure Sector.

The policy and process reforms have resulted in enhanced systems and processes for credit discipline, recognition and resolution of stressed assets, responsible lending, improved governance, financial inclusion initiatives, technology adoption etc. These measures have led to a sustained financial health and robustness of banking sector as a whole which is reflected in the current performance of the PSBs.