The finance ministry has called a meeting of heads of public sector banks (PSBs) on Friday to review financial performance, progress of credit flow to the agriculture sector and MSMEs amid the West Asia crisis.

The meeting is scheduled to be chaired by Financial Services Secretary M Nagaraju, a day ahead of his superannuation.

This is the first meeting after state-owned banks posted a record profit of ₹1.98 lakh crore for the financial year ended March 2026.

The review meeting on May 29 with public sector banks will also deliberate upon the operations of regional rural banks and their financial performance, according to sources.

Besides, sources said, there would be a discussion on AI and digital frauds and progress with regard to the Jan Samarth portal.

There would be a discussion about the recovery mechanism and progress under the DRT and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.

Public sector banks (PSBs) have recorded an all-time high net profit of ₹1.98 lakh crore in 2025-26, marking the fourth straight year of profitability.

Improved asset quality, healthy credit expansion and higher income contributed to improved profitability of PSBs during 2025-26.

Aggregate operating profit reached ₹3.21 lakh crore, while aggregate net profit increased by 11.1 per cent year-on-year to a historic high of ₹1.98 lakh crore.

The aggregate business of PSBs increased to ₹283.3 lakh crore as of March 31, 2026, registering growth of 12.8 per cent over the previous year.

Aggregate deposits rose 10.6 per cent to ₹156.3 lakh crore, reflecting continued depositor confidence and strong resource mobilisation by PSBs.

Gross advances registered growth of 15.7 per cent to ₹127 lakh crore, indicating sustained credit demand across sectors of the economy.

Asset quality of PSBs improved significantly during 2025-26, with gross NPA ratio (non-performing assets) declining to 1.93 per cent and net NPA ratio to 0.39 per cent as of March 31, 2026, reflecting historically low levels of stressed assets.

Fresh slippages continued to decline during FY26, with the slippage ratio reducing to 0.7 per cent. Total recoveries, including recoveries from written-off accounts, stood at ₹86,971 crore, reflecting improved recovery mechanisms and better credit discipline across PSBs.

Published on May 28, 2026