PM Modi Applauds PSU Banks' Role In Banking Sector's 'Unbelievable Comeback'

Prime Minister Narendra Modi retweeted a post by the government’s public outreach handle on Wednesday about the remarkable performance of public sector banks (PSU banks) in India.

The tweet highlighted the significant surge in net profits and the reduction in non-performing assets (NPAs) over recent years as a major improvement for these lenders.

What Happened: “PSU Banks are soaring to unprecedented heights!” the post from MyGovIndia stated. It mentioned that the net profit of PSU Banks has increased fourfold, showcasing the growth of banks like State Bank of India (SBI), Bank of Baroda and Canara Bank.

“Insightful data on how there has been a transformation in the banking sector and how PSU banks are powering it,” Prime Minister Modi tweeted.

The tweet also noted that PSU Banks have outperformed their peers in stock indices over the past year. “Net profit by PSU Banks surged 4X. From SBI to Bank of Baroda to Canara Bank, witness the remarkable growth in profit of Public Sector Banks.”

An attached graphic showed that public banks’ profits for the financial year ended 2024 had skyrocketed from those seen in FY14.

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Additionally, the tweet emphasised the reduction in NPAs, which stood at ₹2.27 lakh crore in March 2014 and decreased to ₹1.02 lakh crore by 2022-23. This improvement marks a significant achievement in the financial health of PSU banks.

Why It Matters: The resurgence of PSU Banks is crucial for India’s economy. The substantial increase in net profits and the reduction in NPAs indicate a stronger banking sector. This growth can lead to increased investor confidence and more robust financial stability.

The banking sector, especially public banks, had come under fire for financing risky projects and being involved in several corporate frauds in previous decades. The issue has become a major focal point for the Modi government’s claims of policymaking and governance, which has regularly highlighted its efforts to effect reforms in the sector.

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