Gross Non-Performing Assets (GNPA) of Public Sector Banks (PSBs) at historic low of 1.9% in FY 2025–26, achieve highest-ever net profit of ₹ 1.98 lakh crore; aggregate business reaches over ₹283 lakh crore

Why in news

The article highlights the significant improvement in the financial health of Public Sector Banks (PSBs), marked by historically low Gross Non-Performing Assets (GNPAs) and record net profits in FY 2025-26. It also details sustained credit growth across various economic sectors.

Exam relevance

GS3 · Economy, Governance · Prelims · Mains

Key facts

1. Gross Non-Performing Assets (GNPAs) of Public Sector Banks (PSBs) reached a historic low of 1.9% in FY 2025-26.
2. PSBs achieved their highest-ever net profit of ₹1.98 lakh crore in FY 2025-26.
3. The aggregate business of PSBs reached over ₹283 lakh crore in FY 2025-26.
4. Total deposits for PSBs stood at ₹156.3 lakh crore in FY 2025-26.
5. Total loans and advances by PSBs amounted to ₹127.0 lakh crore in FY 2025-26.
6. Capital Adequacy - CRAR for PSBs increased to 16.6% in FY 2025-26.
7. Credit growth in the retail loan segment was 19.8% in FY 2025-26.
8. Credit growth in the MSME loan segment was 19.6% in FY 2025-26.
9. Credit growth in agriculture and allied activities loans was 16.2% in FY 2025-26.
10. Credit growth in infrastructure loans was 4.9% in FY 2025-26.

Prelims pointers

• GNPA of PSBs reached a historic low of 1.9% in FY 2025-26.
• PSBs recorded their highest-ever net profit of ₹1.98 lakh crore in FY 2025-26.
• Aggregate business of PSBs exceeded ₹283 lakh crore in FY 2025-26.
• Retail loan growth was 19.8% and MSME loan growth was 19.6% in FY 2025-26.
• Capital Adequacy Ratio (CRAR) for PSBs stood at 16.6% in FY 2025-26.

Mains practice question

Analyze the recent financial performance of Public Sector Banks (PSBs) in India, focusing on the reduction in Gross Non-Performing Assets (GNPAs) and the growth in net profits. Discuss the implications of these trends for credit growth and overall economic development.

Static linkage

This news relates to the banking sector in India, specifically Public Sector Banks (PSBs). It touches upon key financial indicators like Gross Non-Performing Assets (GNPAs), net profits, credit growth, and capital adequacy, which are crucial for understanding the health and performance of the financial system. The Reserve Bank of India (RBI) plays a significant role in regulating and overseeing these banks.

Significance

The significant reduction in GNPA and the record net profit indicate a strengthening financial position for PSBs, which can lead to increased lending capacity and contribute to economic growth. Robust credit growth in sectors like MSME and retail suggests increased economic activity and demand. Improved capital adequacy ratios enhance the resilience of these banks against financial shocks. This trend is vital for overall economic stability and development.