FM Sitharaman likely to review PSU banks’ FY25 performance on May 15

Apart from financial performance, the review will also assess bank-wise efforts in enhancing credit outreach, digital financial services, financial inclusion under Jan Dhan and PM SVANidhi schemes, as well as ongoing progress in recovery from bad loans, the source said.

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26 Aug, 2025 12:21

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The Finance Ministry is likely to hold a comprehensive review of the financial performance of public sector banks (PSBs) for the financial year 2024-25 on May 15, chaired by Finance Minister Nirmala Sitharaman, two sources familiar with the development told Moneycontrol.

The meeting will see participation from the managing directors of all PSBs and the chairman of State Bank of India, the Financial Services Secretary M Nagaraju, and senior officials from the Department of Financial Services (DFS).

“The review of FY25 bank results is the main agenda. Business performance, recoveries, digital banking, and financial inclusion will also be reviewed,” one source aware of the development told Moneycontrol.

This will be the first formal performance review of PSBs after the government’s Operation Sindoor, during which banks were asked to strengthen their cybersecurity.

Apart from financial performance, the review will also assess bank-wise efforts in enhancing credit outreach, digital financial services, financial inclusion under Jan Dhan and PM SVANidhi schemes, as well as ongoing progress in recovery from bad loans, the source said.

The Finance Minister is also expected to nudge banks to strengthen governance, risk compliance, and lending practices, particularly in the context of ongoing heightened global tensions, said the source.

Read More: Govt may begin offloading minor stakes in five PSU banks via OFS in FY27

The review comes on the back of robust financials reported by the PSBs during the April–December period of FY25. PSBs have posted the highest-ever net profit of Rs 1.29 lakh crore in the April–December period of the current fiscal year, marking an annual increase of 31.3 per cent.

Read More: Listed banks post over Rs one lakh crore profit for Q4FY25, match Sept quarter record

The 12 state-owned banks collectively posted a net profit of Rs 1.29 lakh crore during the first nine months of FY25, up 31.3 percent on-year. Their aggregate operating profit stood at Rs 2.20 lakh crore during the same period.

The consistent performance has been attributed to improved asset quality, a decline in gross non-performing assets (NPAs), and a strengthened capital base supported by internal accruals and market fundraising.

“Public sector banks have demonstrated significant improvement in operational efficiency, risk management, and digital adoption, which has translated into sustained profitability,” another official said.

The Nifty PSU Bank index is down 6 percent over last one year, and is trading flat so far in 2025.