PSBs clocked 11% growth in H1FY25

The Union Finance Ministry on Tuesday said that aggregate business of public sector banks (PSBs) has shown strong growth of 11 per cent in the first half of the financial year 2024-25 (H1FY25) to touch Rs 236 trillion.

The operating and net profit were also robust.

At Rs 1.5 trillion, operating profit grew by 14.4 per cent year-on-year (Y-o-Y) while the net profit saw an impressive 25.6 per cent jump at Rs 85,520 crore in the first half of FY25.

The ministry said that the global credit and deposit portfolio of PSBs grew by 12.9 per cent and 9.5 per cent Y-o-Y to Rs 102.29 trillion and Rs 133.75 trillion respectively.

“Under the leadership of the Prime Minister, Narendra Modi, and the guidance of the Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, major banking reforms like Implementation of Enhance Access and Service Excellence (EASE), enactment of Insolvency and Bankruptcy Code (IBC), putting in place a robust Governance Framework, setting up of National Asset Reconstruction Company Ltd. (NARCL), amalgamation of PSBs among others., were undertaken in the last few years,” the finance ministry said in a statement.

The gross and net NPA stood at 3.12 per cent and 0.63 per cent as of September 2024. Gross and net NPA declined by 108 bps and 34 bps respectively Y-o-Y.

However, the capital to risk weighted average assets ratio (CRAR) stood at 15.43 per cent in September 2024, against regulatory requirement of 11.5 per cent.

“The reforms and regular monitoring have addressed many concerns and challenges, and resulted in setting-up enhanced systems and processes for credit discipline, recognition and resolution of stressed assets, responsible lending, improved governance, financial inclusion initiatives, technology adoption etc.

"These measures have led to a sustained financial health and robustness of the banking sector as a whole which is reflected in the current performance of the PSBs,” it added.

There are currently 12 public sector banks in India including State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BOB), Indian Overseas Bank (IOB), UCO Bank among others.

“PSBs have also shown significant progress in adopting new age technologies like AI/ cloud/ Blockchain etc., upgradation of existing digital infrastructure, putting in place necessary systems/ controls to tackle cyber security risks and taking multiple steps to provide best-in-class customer services,” the statement read.

Meanwhile, on November 11, Department of Financial Services, Secretary, M Nagaraju chaired a meeting with all stakeholders for carrying out fresh Know Your Customer (re-KYC) process for the Pradhan Mantri Jan Dhan Yojana (PMJDY) account holders.

During the meeting, Nagaraju suggested using all means for doing re-KYC -- such as fingerprints, face recognition, taking declarations where no change in KYC documents occurred -- through all channels like ATM, mobile banking, internet banking, and other available digital channels.

PSBs should also look forward to implement best practices adopted by other peer banks, he said.