Finance Minister to Meet Public Sector Banks for Annual Review
Finance Minister Nirmala Sitharaman is scheduled to meet with heads of public sector banks (PSBs) on June 27 to address a range of topics, including the implementation of various government programs and an assessment of financial performance, amid the Reserve Bank's rate lowering.
This will be the first review meeting following the Reserve Bank's 50 basis point major policy rate decrease later this week and its surprise reduction in the cash reserve ratio for banks to increase lending capacity in an effort to stimulate the economy.
The benchmark repurchase or repo rate was lowered by 50 basis points to 5.5 percent by a five-to-one decision of the RBI's six-member monetary policy committee, which is led by Governor Sanjay Malhotra and includes three external members.
Additionally, it cut the cash reserve ratio by 100 basis points to three percent in tranches, which will increase the banking system's already excess liquidity by Rs.2.5 lakh crore.
The public sector banks' financial performance and goals for the current fiscal year would be examined by the finance minister.
Additionally, according to reports, the minister would encourage public sector banks to lend more to productive industries in order to support economic development, which in FY25 fell to a four-year low of 6.5 percent.
Thorough analysis of the development of several government programs, such as the PM Mudra, Kisan Credit Card, and the three Jan Suraksha social security programs—Pradhan Mantri Pradhan Mantri Suraksha and the Jeevan Jyoti Bima Yojana (PMJJBY) During the meeting, Bima Yojana (PMSBY) and Atal Pension Yojana (APY) may be discussed.
It should be mentioned that in the fiscal year that ended in March 2025, the cumulative profit of Public Sector Banks (PSBs) increased by 26 percent to a record amount of Rs.1.78 lakh crore.
In FY'24, the combined profit of the 12 public sector banks was Rs.1.41 lakh crore.
In FY25, the profit grew by around Rs.37,100 crore in absolute terms from the previous year.
According to data released by stock exchanges, market leader State Bank of India (SBI) alone accounted for more than 40 percent of the Rs.1,78,364 crore in total profits made in FY'25.
In FY25, SBI recorded a net profit of Rs.70,901 crore, which was 16 percent more than the Rs.61,077 crore recorded in the previous fiscal year.
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Punjab National Bank, situated in Delhi, posted the largest net profit growth in percentage terms, rising 102 percent to Rs.16,630 crore. Punjab & Sind Bank, on the other hand, increased 71 percent to Rs.1,016 crore.