New Delhi [India], July 28 : Public Sector Banks (PSBs) witnessed a robust improvement in asset quality in FY 2025-26, with Gross Non-Performing Assets (GNPA) falling to a record-low 1.9 per cent and combined net profit hitting an all-time high of Rs 1.98 lakh crore, the Ministry of Finance said.
As per a statement by the Finance Ministry, the aggregate business of PSBs crossed Rs 283 lakh crore in FY26, alongside robust credit growth, with MSME and retail lending rising 19.6 per cent and 19.8 per cent, respectively.
"The financial health of Public Sector Banks (PSBs) have shown significant improvement with healthy balance sheets, historically high profits and multi-decadal low level of gross non-performing assets (GNPAs)," the Ministry said in the release.
As per the release, total deposits rose from Rs 107.2 lakh crore in FY22 to Rs 156.3 lakh crore in FY26 for PSBs. Likewise, total loans and advances increased from Rs 74.3 lakh crore to Rs 127 lakh crore during the same period. Net profit also surged from Rs 0.67 lakh crore in FY22 to Rs 1.98 lakh crore in FY26. Meanwhile, Gross NPAs declined steadily from 7.3 per cent to 1.9 per cent.
Capital adequacy also strengthened, with the Capital to Risk-weighted Assets Ratio (CRAR) rising from 14.6 per cent to 16.6 per cent over the five-year period.
"PSBs have recorded sustained credit growth across different sectors of the economy," it said.
The release further highlighted, the government introduced the Emergency Credit Line Guarantee Scheme (ECLGS 5.0) in May 2026 to help businesses address short-term liquidity challenges arising from the West Asia crisis. "The scheme provides guarantee coverage to Member Lending Institutions (MLIs) through National Credit Guarantee Trustee Company Limited (NCGTC) for the amount in default under the additional credit facility extended to the eligible borrowers," it said.
The scheme offers 100 per cent guarantee coverage for MSMEs and 90 per cent for non-MSMEs and scheduled passenger airlines, with total credit support capped at Rs 2,55,000 crore, including Rs 5,000 crore specifically allocated to the scheduled passenger airline sector.