5 PSU Banks Gearing up to List Their Subsidiaries After FM's Monetisation Drive

 

Public sector banks are being pressured by the government to expedite their plans for initial public offerings (IPOs) for their joint ventures and subsidiaries. 

 For a medium- to long-term market debut or strategic disposal, nearly 15 of these firms have been shortlisted. The objective? To maximize returns on state-owned capital, unlock value, improve governance, and access public markets when they're needed.

PSBs have been encouraged to increase capital in their subsidiaries, improve operational efficiency, and streamline decision-making in order to become listing-ready. 

 The finance ministry also wants a more professional approach overall and better governance. These five public sector banks are laying the foundation for their subsidiaries that may soon be on the market.

PSU Bank	Subsidiary	Business Type
State Bank of India	SBI General Insurance	General Insurance
	SBI Payment Services	Merchant Payments
Canara Bank	Canara Robeco AMC	Mutual Fund / Asset Mgmt
	Canara HSBC Life Insurance	Life Insurance
Bank of Baroda	IndiaFirst Life Insurance	Life Insurance
Union Bank of India	IndiaFirst Life Insurance	Life Insurance
Central Bank of India	Cent Bank Home Finance Ltd	Housing Finance
	Centbank Financial Services Ltd	Financial Advisory / Trustee
Punjab National Bank	PNB MetLife India Insurance	Life Insurance

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EASE 7.0 Winner Banks: Best Performing Bank, Check Rank of Banks

The EASE 7.0 Award winners have been announced by the Indian government. As part of the PSB Reforms Agenda, the Department of Financial Services, Ministry of Finance, Government of India, launched the Enhanced Access & Service Excellence (EASE) program. The prize for India's best-performing public sector bank goes to State Bank of India (SBI). 

 Top-Performing Financial Institutions

1. State Bank of India (SBI)
2. Bank of Baroda
3. Union Bank of India

Top Improvers

1. Punjab & Sind Bank
2. Bank of India
3. UCO Bank

Data Quality Recognition

1. Indian Bank
2. Central Bank of India
3. Bank of Maharashtra

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Are bank workers in the PSU Bank becoming more productive?

As a result of increased operational efficiency and staff productivity, public sector banks' (PSBs') Business Per staff (BPE) has improved dramatically over time.

Based on data gathered by Business Standard from the most recent PSB annual reports, the BPE of State Bank of India (SBI) increased from Rs.34.10 crore in FY24 to Rs.37.37 crore in 2024-25 (FY25), that of Punjab National Bank (PNB) increased from Rs.23.84 crore to Rs.26.86 crore, and that of Bank of Baroda (BoB) increased from Rs.29.31 crore to Rs.32.53 crore.

A stronger basis for long-term growth and profitability is indicated by the rise in BPE, which shows that each employee is producing more business than previously due to cost reduction, digital adoption, and improved resource use.

This growth can be attributed to two factors. First, the banks have been using technology, digitalization, and training as interventions to improve procedures, including sales activities. Productivity is steadily increasing as a result. Second, as the economy and per capita income expand overall, so do the underlying transaction sizes, which improves results," stated Sanjay Agarwal, senior director at CARE Ratings Ltd.

The BPE of UCO Bank grew from Rs.20.93 crore in FY24 to Rs.24.35 crore in FY25. Likewise, Canara Bank's BPE increased from Rs.25.97 crore to Rs.29.30 crore in FY25.  A year-over-year (Y-o-Y) increase in its BPE from Rs.25.87 crore to Rs.28.21 crore was also reported by Bank of India (BoI).

 

Aggarwal issued a warning, though, saying that banks must make sure that the rush for more productivity doesn't result in employees expecting an intolerable amount of work or in a greater distance from consumers.

Over time, the majority of PSBs have seen a decrease in their workforce.From 52,374 in FY23 to 50,944 in FY24 and then to 50,564 in FY25, BoI showed a steady reduction. The number of employees at Canara Bank similarly declined, going from 84,978 in FY23 to 82,638 in FY24 and finally to 81,260 in FY25.

At 76,513 in FY23, the BoB headcount gradually decreased to 74,227 in FY24 and 73,742 in FY25. Conversely, SBI, the biggest lender, saw a little increase in overall staff numbers to 236,226 in FY25 following a drop from 235,858 in FY23 to 232,296 in FY24. According to their yearly reports, all PSBs now have more branches.In FY23, SBI had 22,405 branches; in FY24, it had 22,542 branches; and in FY25, it had 22,937 branches.

The Reserve Bank of India has warned that there is an increasing risk of over-automation or erosion of credit evaluation standards as a result of a higher reliance on system-driven processes, especially in areas like top-up loans and unsecured lending.

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The number of employees at PSU banks is steadily declining: Report

According to a data compiled by the daily, PSBs including Bank of India, Canara Bank,Bank of Baroda and Uco Bank witnessed a drop in its employee size, whereas the State Bank of India and Punjab National Bank saw a slight increase in the headcount.

According to the research, Bank of India's workforce decreased from 52,374 in the fiscal year (FY) 2023 to 50,944 in 2024 and then to 50,564 in 2025. The number of employees at Canara Bank similarly declined, going from 84,978 in FY23 to 82,638 in FY24 and 81,260 in FY25. Bank of Baroda also continued to reduce, going from 76,513 in FY23 to 74,227 in FY24 and then even lower to 73,742 in FY25. From 21,698 in FY23 to 21,456 in FY24 and then to 21,049 in FY25, Uco Bank's workforce shrank.

On the other hand, for SBI, which is the largest PSB in India, there was a slight recovery after falling from 235,858 in FY23 to 232,596 in FY24. In FY25, the headcount increased to 236,226, the report stated. Meanwhile, PNB also saw its employee count increase slightly from 102,319 in FY23 to 102,349 in FY24 before slightly falling to 102,316 in FY25.

Concerns have been expressed by a number of bank unions regarding the recent decrease in employee numbers. Bank workers also protested earlier this year in a few towns. They have claimed that having too few employees is affecting both customer service and employee wellbeing. The chief secretaries of states and union territories have allegedly been urged by the finance ministry to raise awareness among bank workers and ensure that the public gets uninterrupted service. This follows social media posts and news stories detailing instances of physical assault, verbal abuse, and threats of violence against bank employees on the property.

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Public Sector Banks Surpass Private Banks in Loan Disbursals

In India, government banks have recovered significantly. Public sector banks (PSBs) have provided more loans than private banks for the first time in fifteen years. This represents a significant shift in the nation's banking industry. In the personal loan market, where government banks are currently lending more quickly than private banks, the expansion has been particularly robust. This change demonstrates how actively and competitively government banks are responding to consumer demands. For the first time in more than ten years, public sector banks have surpassed private banks in terms of overall loan distribution, making this accomplishment a significant turning point. Customers' increasing faith in government banks and their better performance in recent years are reflected in it.

Reason behind this

According to the Reserve Bank of India (RBI) and other financial reports, one of the main reasons of increase in loan disbursals of government banks is that private banks like HDFC Bank and Axis Bank have slowed down their lending. In recent years, private banks usually led in giving loans, but now they are lending less compared to public sector banks.

The fact that government banks are more active in managing loan programs started by the federal and state governments could be another factor. These include programs that give small workers and merchants financial support, such as the PM Vishwakarma Yojana and the PM Svanidhi Yojana. Public sector banks have supplied the majority of the loans under these schemes, with private banks participating in very little of them. This may be a major factor in the fact that public banks are currently lending more money than private ones.

How Much Have Public Sector Banks Grown?

By December 2024, public sector banks recorded a strong 17% growth in personal loan disbursals, while private banks managed only 10% growth in the same category. This clearly shows that public banks are stepping up and winning borrower trust in the retail loan space. Public sector banks aren’t just leading in personal loans—they’re also ahead in industrial and service sector loans.

• Industrial loans: Public banks provided 60% of the total ₹37.9 lakh crore
• Service sector loans: They contributed 56% of ₹49.9 lakh crore
• Personal loans: Public sector banks disbursed 52% of ₹51.1 lakh crore

This wide lead proves that PSBs are playing a much larger role in supporting India’s economy across sectors.

Credit Growth vs Deposits

Interestingly, for the fourth year in a row, banks have given out more loans than the money they have received through deposits.This kind of trend is very rare and has happened only two times in the last 50 years. Most of the money banks received as deposits came from Fixed Deposits (FDs), which made up 86% of the total increase in deposits. As of December 2024, half of all the money kept in banks is now in the form of term deposits like FDs.

Home Loans

Government banks are also doing very well in giving home loans, especially in smaller cities (Tier-3) and rural areas. In the financial year 2024–25, public sector banks gave out 46.4% of all home loans, up from 45.1% the year before.Meanwhile, private banks saw a small drop in their share of home loans—from 54.9% to 53.6%. During this period, public banks gave out ₹2.1 lakh crore in new home loans, which makes up 56.1% of all home loans given that year.

Non-Resident Indians (NRIs)

Deposits by Non-Resident Indians (NRIs) grew well in the financial year 2024–25. Their total deposits increased by 10%, reaching ₹14.16 lakh crore by March 2025. About half of these deposits are in fixed deposits (FDs), which shows that NRIs still have strong trust in India’s public banks for saving their money for the long term.

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PSU Bank Branch Manager sent to 3 years Jail by CBI

 

In connection with a bank fraud case, a special CBI court in Ghaziabad has convicted two people—a private individual and a former bank manager of Union Bank of India—to harsh jail. Manoj Srivastava, the former Branch Manager of Union Bank of India's SSI Branch in Noida, was given a three-year severe prison sentence and a ₹5 lakh fine by the Special Judge for CBI Anti-Corruption proceedings. Private citizen Raj Kumar Samanta, his co-accused, received a ₹10 lakh fine in addition to four years of hard labor. The court fined the two accused a total of ₹15 lakh.

The case was filed by the Central Bureau of Investigation (CBI) on December 14, 2010, in response to claims that Manoj Srivastava, the branch manager, had processed a loan for Raj Kumar Samanta fraudulently. The bank suffered an unjustified loss as a result. On September 29, 2012, the CBI filed a chargesheet against both accused following a thorough investigation. Following the trial, the court imposed the appropriate sentence after finding both defendants guilty of criminal misconduct and cheating.

This judgment underscores the CBI’s continued crackdown on banking fraud and misconduct by public servants in collusion with private individuals.

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PSU Bank Operating Profit, Net Profit & PLI for Q4FY25

 

                               

Public sector banks' cumulative profit rose to a record level of Rs 1.78 lakh crore in the fiscal year ended March 2025, registering a growth of 26 per cent over the previous year.

All 12 public sector banks had earned a total profit of Rs 1.41 lakh crore in FY24.

The year-on-year increase in profit in absolute terms rose by about Rs 37,100 crore in FY25.

Out of the total profit of Rs 1,78,364 crore earned during the FY25, market leader State Bank of India (SBI) alone contributed over 40 per cent of the total earnings, as per the published numbers on stock exchanges.

Bank	Operating Profit (In Crore)	Net Profit (In Crore)	PLI(In days)
Bank of Baroda (BOB)	8132	5048	-
Bank of India(BOI)	4884	2626	15
Bank of Maharashtra(BOM)	2520	1493
Canara Bank	8284	5004
Central Bank of India	2003	1034
Indian Bank	5024	2961
Indian Overseas Bank(IOB)	2618	1051	15
Punjab & Sind Bank	816	312
Punjab National Bank(PNB)	6775	4567	14
State Bank of India(SBI)	70901	18643
UCO Bank	1698	652	15
Union Bank of India	7700	4984

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