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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Bank of India(BoI) Q4 Net profit jumps 82% YoY

 

Bank of India(BoI) on Friday, May 9, reported its March quarter earnings, in which net profit rose 82.5% year-on-year to ₹2,626 crore, compared to ₹1,439 crore in the same quarter a year ago.

The bank's Net Interest Income (NII) or core income rose 2.1% to ₹6,063 crore as against ₹5,936 crore in the year-ago quarter.

The company's asset quality also improved, with Gross Non-Performing Assets (NPA) declining to 3.27% from 3.69%, and Net NPA reducing to 0.82% from 0.85% last year.

Bank of India recommended a dividend of ₹4.05 (40.50%) per equity share of ₹10 face value for the financial year 2024-25, subject to approval of shareholders at the ensuing Annual General Meeting of the Bank.

Record date for the said dividend has been fixed as June 20, 2025. Hence, shareholders having shares as on the cut-off date i.e. June 20 will be eligible for the dividend payment.

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Union Bank Of India Q4 Results: Profit Beats Estimates, Asset Quality Improves

 

Union Bank of India reported a rise in its standalone net profit in the fourth quarter of financial year 2024-25, beating estimates.

The bottomline of the public sector bank jumped 50.6% to Rs 4,985 crore in the January-March period, compared to Rs 3,310 crore in the year-ago period, according to a stock exchange filing on Thursday. The analysts' consensus estimates compiled by Bloomberg projected Rs 4,320.6 crore.

Net interest income rose 1% to Rs 9,514 crore versus Rs 9,437 crore last year. The Bloomberg estimate was Rs 9,373 crore.

Union Bank of India demonstrated an improvement in asset quality on a sequential basis, with gross non-performing assets ratio decreasing to 3.6% from 3.85% quarter-on-quarter, and net NPA ratio also declining to 0.63% from 0.82%.

The bank's operating profitability showed strong growth, increasing by 17.9% to Rs 7,700 crore compared to Rs 6,533 crore.

Provisions saw an increase of 22.6% year-on-year, rising to Rs 1,544 crore from Rs 1,260 crore. However, on a sequential basis, provisions saw a slight decrease of 3.4%, down to Rs 1,544 crore from Rs 1,599 crore.

The board has recommended a dividend of Rs 4.75 per equity share for fiscal 2025, subject to obtaining the necessary statutory approvals and the approval of the shareholders at the ensuing annual general meeting.

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Canara Bank Q4 results: Net profit jumps 33%

On Thursday, May 8, Canara Bank revealed its January–March results, showing a 33% increase in net profit year over year to ₹5,002.7 crore. In the same quarter last year, it was ₹3,757 crore.

In comparison to ₹9,580 crore in the same quarter last year, the PSU-lender's net interest income (NII), which is the difference between interest received and interest spent, increased 1.4% year over year to ₹9,442 crore in the March quarter. 

The operating profit and NII of Canara Bank exceeded projections. In the quarter, the bank's gross nonperforming assets (GNPA) ratio decreased from 3.34% in December 2024 to 2.94%. From 0.89% in the previous quarter, the net non-performing asset ratio improved to 0.70%.

Compared to 91.26% in Q3FY25, the provision coverage ratio (PCR) was 92.70% in Q4. In contrast to the ₹2,464 crore in the previous December quarter, the bank's slippages totaled ₹2,702 crore. Additionally, the amount exceeded projections of ₹2,650 crore. For FY26, Canara Bank anticipates advance growth of 10–11%. 

 The lender wants to see a 9–10% increase in deposits together with a significant improvement in asset quality. For the fiscal year 2024–2025, the board has suggested paying a 200% dividend, or ₹4 per share, on the bank's equity shares, which have a face value of ₹2. The aforementioned dividend's record date is June 13, 2025.

Record date for the said dividend has been set as June 13, 2025.The dividend, if approved by the shareholders of the bank, will be paid after the AGM on June 13.

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Punjab National Bank(PNB) Q4 Net profit surges 52% YoY

With a net profit that increased 52% year over year (YoY) to Rs 4,567 crore from Rs 3,010 crore in Q4FY24, state-owned Punjab National Bank (PNB) announced a solid March quarter. Better asset quality and more interest revenue helped to sustain this strong growth. 

 Healthy rise in net interest income (NII) and non-interest income drove the 13.4% YoY increase in total income for Q4FY25, which came to Rs 36,705 crore. A consistent increase in lending activity was reflected in Net Interest Income (NII), which increased 4% YoY to Rs 10,757 crore. Additionally, non-interest income increased by 11% to Rs 4,716 crore.

On the operational front, PNB’s operating profit for Q4FY25 was Rs 6,776 crore, up 6% YoY, as the bank kept a check on operating expenses, which rose by only 6.1% YoY to Rs 8,697 crore.

PNB’s asset quality saw a marked improvement, with the gross non-performing assets (GNPA) ratio declining to 3.95% as of March 2025, compared to 5.73% a year ago. Net NPA (NNPA) also fell to 0.4% from 0.73%.

The bank’s provision coverage ratio (PCR), including technical write-offs, improved to 96.82%, up from 95.39% in the previous year.

For the full year FY25, PNB posted a net profit of Rs 16,630 crore, up 102% YoY. Total deposits grew 14.38% YoY to Rs 15.67 lakh crore, while global advances rose 13.56% to Rs 11.17 lakh crore.

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DFS Secretary conducts surprise visits to PSU Bank Branch to check Services

 According to sources, M Nagaraju, the secretary of the Department of Financial Services (DFS), visited several Public Sector Bank offices in New Delhi to assess customer service. Last week, he went to many locations to see how well staff members were assisting clients. 

However, he is reportedly dissatisfied with the banks' customer service and was somewhat disappointed during his visit. He had to wait almost an hour to meet the branch manager at one large bank, who was on the phone and didn't recognize him. The staff's demeanor and attitude in other branches were equally lacking.

These surprise inspections were conducted to assess how financial inclusion programs were being carried out and to compare PSB customer service to private bank customer care. DFS officials discovered that PSB employees frequently dealt with clients less politely and pro-actively. 

 The secretary has since given banks advice on how to behave better and treat their customers with more decency and assistance. Public sector banks have numerous challenges, including staff shortages, poor IT infrastructure, and employee transfers. Private banks and PSU banks operate completely differently. PSU banks prioritize the welfare of the public, while private banks are solely focused on making ever-increasing profits.

The number of customers visiting PSU Banks is much more than the number of customers visiting Private Banks. There are a lot of branches of PSU Banks where almost 200-300 customers visit per day and it’s practically impossible to provide good customer service without adequate staff. Thus, the PSU banks should not be compared with Private Banks.

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