Public Sector Banks Achieve Record Financial Performance in FY 2025-26
Public Sector Banks (PSBs) have demonstrated significant improvement in financial health, achieving a historic low Gross Non-Performing Assets (GNPA) ratio of 1.9% and recording their highest-ever net profit of ₹1.98 lakh crore for the fiscal year ending March 31, 2026. The aggregate business of PSBs reached ₹283.3 lakh crore, comprising total deposits of ₹156.3 lakh crore and total loans & advances of ₹127.0 lakh crore. The capital adequacy ratio (CRAR) improved to 16.6%, indicating strengthened financial stability.
Five-Year Performance Trend Shows Consistent Improvement
The financial performance metrics reveal a consistent improvement pattern over the past five years. Total business grew from ₹181.5 lakh crore in FY 2021-22 to ₹283.3 lakh crore in FY 2025-26, while net profit increased substantially from ₹0.67 lakh crore to ₹1.98 lakh crore during the same period. The GNPA ratio showed remarkable improvement, declining from 7.3% in FY 2021-22 to the current historic low of 1.9% in FY 2025-26.
Robust Credit Growth Across Key Sectors
PSBs recorded sustained credit growth across various sectors of the economy. Retail loans showed particularly strong growth at 19.8% year-on-year in FY 2025-26, followed by MSME loans at 19.6% and agriculture & allied activities loans at 16.2%. Infrastructure loans pertaining to the industries sector grew at 4.9%. The credit growth pattern over the past five years shows MSME loans recovering from negative growth of -1.7% in FY 2021-22 to the current robust performance.
Government Introduces ECLGS 5.0 Scheme for Liquidity Support
The Government introduced the Emergency Credit Line Guarantee Scheme (ECLGS 5.0) in May 2026 to address short-term liquidity mismatches faced by businesses due to the West Asia Crisis. The scheme provides guarantee coverage through National Credit Guarantee Trustee Company Limited (NCGTC) for additional credit facilities extended to eligible borrowers. The scheme offers 100% guarantee coverage for MSMEs and 90% guarantee coverage for non-MSMEs and the scheduled passenger airline sector, with a total credit flow limit of ₹2,55,000 crore, including ₹5,000 crore specifically earmarked for the airline sector.
For the airline sector, borrowers are eligible for assistance up to 100% of their total peak credit outstanding during the fourth quarter of FY 2025-26 (January 1 to March 31, 2026). The maximum loan amount is ₹1,500 crore per borrower, with amounts beyond ₹1,000 crore requiring proportionate equity contribution from promoters/owners.
This information was formally presented by Minister of State in the Ministry of Finance Shri Pankaj Chaudhary in a written reply to a question in Rajya Sabha on July 28, 2026.