Finance Minister Nirmala Sitharaman Holds Annual Review Meeting with Public Sector Banks; Focus on Deposit Growth, Loan Recovery, and Cybersecurity
On June 27, 2025, Finance Minister Nirmala Sitharaman convened a pivotal annual review meeting with the heads of India’s Public Sector Banks (PSBs) to assess the banks’ financial performance for the fiscal year 2024-25 and discuss strategic priorities for the current year. The high-profile meeting was attended by Minister of State for Finance Pankaj Chaudhary, the Secretary of the Department of Financial Services (DFS), and Managing Directors and Chief Executive Officers of all 12 PSBs.
Key Topics on the Agenda
The review session centered on critical areas including deposit growth, enhancing loan recovery, cybersecurity measures, and the performance of various government-backed credit and social security schemes. As India’s economy seeks renewed momentum following a four-year low growth rate of 6.5% in FY25, the Finance Ministry emphasized the importance of revitalizing credit flow, especially towards productive and sunrise sectors, to bolster economic expansion.
This meeting also notably coincided with the Reserve Bank of India’s recent major monetary easing measures. Earlier in June, the RBI cut the benchmark repo rate by 50 basis points to 5.5% and reduced the cash reserve ratio (CRR) by 100 basis points in phased tranches, lowering it to 3%. These changes were aimed at increasing liquidity and encouraging banks to lend more aggressively to support growth.
Financial Performance Highlights of PSBs in FY25
Public Sector Banks demonstrated robust financial results for FY25, collectively registering a record cumulative profit of Rs 1.78 lakh crore, a 26% year-on-year growth compared to Rs 1.41 lakh crore in FY24. The absolute increase amounted to approximately Rs 37,100 crore.
Among PSBs, State Bank of India (SBI) remained the dominant contributor, accounting for over 40% of total profits with a net profit of Rs 70,901 crore in FY25, reflecting a 16% increase over the previous fiscal year’s Rs 61,077 crore. Punjab National Bank reported the highest net profit growth in percentage terms, surging by 102% to Rs 16,630 crore, while Punjab & Sind Bank recorded a 71% profit increase to Rs 1,016 crore.
All 12 public sector banks reported profit increases during the period, signaling improved operational efficiencies and asset quality.
Emphasis on Government Schemes and Digital Infrastructure
The meeting also included reviews of the progress made under key government schemes such as the Kisan Credit Card, Pradhan Mantri Mudra Yojana, and social security schemes including Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, and Atal Pension Yojana. The Finance Ministry urged PSBs to reinforce their role in broadening financial inclusion and enhancing digital infrastructure, vital for supporting India’s evolving banking ecosystem.
Calls for Enhanced Credit Growth and Cybersecurity
Finance Minister Sitharaman reportedly encouraged PSBs to increase credit deployment towards productive sectors that can accelerate economic revival. Given the rising sophistication of cyber threats targeting the banking system, bolstering cybersecurity frameworks was also underscored as a high priority to safeguard institutional and customer interests.
Looking Ahead
This annual review marks a critical juncture as PSBs prepare to leverage recent RBI policy support and internal strengths to foster sustainable growth. With the concerted focus on loan recovery, augmenting deposits, expanding credit to emerging sectors, and securing digital infrastructure, India’s state-run banks aim to play a strategic role in rejuvenating the country’s economic trajectory.
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(With inputs from ET Now and PTI)