Public Sector Banks (PSBs) have reported strong financial performance in the first three quarters (December) of the current financial year 2024-25, with a significant 31.3% year-on-year growth in net profit, reaching a record high of Rs. 1,29,426 crore. This impressive profit surge is supported by an aggregate operating profit of Rs. 2,20,243 crore for the same period as per a press release from the Ministry of Finance on Thursday.

Key financial indicators show that PSBs have not only improved profitability but also enhanced asset quality. The Net Non-Performing Assets (NPA) ratio has dropped to a mere 0.59%, with an aggregate net NPA outstanding at Rs. 61,252 crore. The overall business of PSBs grew by 11.0% year-on-year, with deposits increasing by 9.8%. The total aggregate business now stands at Rs. 242.27 lakh crore.

Credit growth also remained robust at 12.4%, driven by a 16.6% increase in retail credit, a 12.9% rise in agriculture credit, and a 12.5% expansion in credit to Micro, Small, and Medium Enterprises (MSMEs). PSBs have built strong capital buffers, boasting an Aggregate Capital to Risk-Weighted Assets Ratio (CRAR) of 14.83%, well above the required 11.5%.

PSBs are now well-capitalized to meet the growing credit demands across all sectors, with a special focus on agriculture, MSMEs, and infrastructure. Reforms in policies and processes, including improved governance, financial inclusion initiatives, and advanced credit discipline, have contributed to this sustained financial health and resilience of the banking sector.