Overview
The PSBs have shown a dramatic improvement in financial health during FY 2025‑26. Their gross non‑performing assets fell to a historic low of 1.9%, while net profit surged to ₹1.98 lakh crore. At the same time, the Government introduced the ECLGS 5.0 to cushion liquidity stress.
Key Developments (FY 2025‑26)
- Gross GNPA fell to 1.9%, down from 7.3% in FY 2022‑23.
- Net profit of PSBs reached a record ₹1.98 lakh crore, up from ₹0.67 lakh crore in FY 2022‑23.
- Total business (deposits + loans) crossed **₹283 lakh crore**, a 56% rise over five years.
- Capital Adequacy Ratio (CRAR) improved to **16.6%**, exceeding the regulatory minimum.
- Credit growth remained robust: Retail loans grew **19.8%**, MSME loans **19.6%**, and agriculture loans **16.2%** YoY.
- Government launched ECLGS 5.0 with 100% guarantee for MSMEs and 90% for non‑MSMEs and scheduled passenger airlines, covering up to **₹2.55 lakh crore**.
Important Facts and Figures
Total Business (₹ lakh crore): 181.5 (2022), 203.2 (2023), 226.7 (2024), 251.7 (2025), **283.3** (2026).
Total Deposits (₹ lakh crore): 107.2 → **156.3** over the period.
Total Loans & Advances (₹ lakh crore): 74.3 → **127.0**.
Sector‑wise credit growth (YoY % in FY 2025‑26):
- Retail Loans: **19.8%**
- Agriculture & Allied Activities: **16.2%**
- MSME Loans: **19.6%**
- Infrastructure (Industries) Loans: **4.9%**
Exam Relevance
These trends illustrate the effectiveness of banking reforms and the role of public sector banks in achieving financial stability – a frequent topic in GS 3 (Economy). Understanding GNPA and CRAR helps answer questions on bank health, credit risk, and regulatory standards. The