Public sector banks (PSBs) are on track to post a record combined profit exceeding Rs 2 lakh crore in the current financial year, Financial Services Secretary M Nagaraju said, expressing confidence in the sector’s improving financial strength and resilience.
Speaking to PTI, Nagaraju emphasised that the broader Indian banking system remains robust, supported by steady credit expansion and healthy deposit mobilisation. Credit growth at PSBs is running at about 12 per cent this year, which he described as tremendously “good”, while deposit growth of around 10 per cent is also reasonably very good.
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 said.
Profit trajectory strengthens
On profitability, Nagaraju indicated that PSBs are poised to cross a historic threshold in FY26.
“this year (ongoing financial year) we will cross Rs 2 lakh crore. We already touched almost Rs 1 lakh crore in the first half…I think we will cross Rs 2 lakh crore,” he said
The sector’s earnings have risen sharply over the past three years. Combined PSB profit crossed Rs 1 lakh crore to reach Rs 1.05 lakh crore in FY23, climbed to Rs 1.41 lakh crore in FY24, and further increased to Rs 1.78 lakh crore in FY25. The improvement has been driven by stronger asset quality, sustained credit growth, comfortable capital buffers and rising return on assets.
