Indian Public Sector Banks Achieve Record Profits and Boost Financial Stability

Indian Public Sector Banks clocked a record net profit of Rs 1.41 lakh crore in 2023-24. The Gross NPA ratio fell to 3.12%, showcasing improved asset quality. Amid strong financial performance, these banks also played key roles in government schemes, ensuring benefits reach underserved communities.

In a significant financial milestone, Indian Public Sector Banks (PSBs) have reported their highest-ever aggregate net profit, reaching Rs 1.41 lakh crore in the financial year 2023-24, according to the Ministry of Finance. This achievement is complemented by a remarkable decline in the Gross Non-Performing Assets (GNPA) ratio, which fell to 3.12% in September 2024. Continuing their positive trajectory, PSBs registered a net profit of Rs 85,5206,000 crore in the first half of 2024-25.

Demonstrating not just financial success, PSBs have also greatly enhanced shareholder value by distributing dividends totaling Rs 61,964 crore over the past three years. The Ministry of Finance credits this growth to better operational efficiency, improved asset quality, and a more robust capital base. It emphasizes the significance of these achievements in the broader context of the sector's turnaround, driven by an overall improvement in asset quality. Beyond financial indicators, PSBs have been crucial to advancing financial inclusion, implementing key government schemes such as the Atal Pension Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana.

The Gross NPA ratio has seen a noteworthy progression, decreasing from a peak of 14.58% in March 2018 to 3.12% in September 2024. This reduction highlights the success of multiple interventions targeting banking sector stress, notably the Reserve Bank of India's 2015 Asset Quality Review (AQR), which focused on the transparent recognition of NPAs and reclassification of certain loans. The Sector's Capital to Risk (Weighted) Assets Ratio (CRAR) has also improved, rising by 3983 basis points to 15.43% in September 2024, far exceeding RBI's minimum requirement of 11.5%, thus indicating heightened financial stability and readiness to support economic growth.

(With inputs from agencies.)