New Delhi: India is on a mission to develop two globally competitive banks that could rank among the world’s top 20 by assets, aligning with its ‘Viksit Bharat 2047’ vision for becoming a fully developed nation. This ambitious goal was discussed during the PSB Manthan 2025 event, wherein high-ranking officials emphasized the need for organic growth as a strategy for achieving this target. In FY25, public sector banks displayed significant profitability, with cumulative profits soaring to a record Rs 1.78 lakh crore.
Vision for Globally Competitive Banks
The Indian financial landscape is undergoing a transformative phase, aiming to position itself on the global stage. A key topic during the PSB Manthan 2025, hosted by the Department of Financial Services, centered around establishing two major banks that could qualify as globally competitive. Currently, the State Bank of India (SBI) ranks 43rd, while HDFC Bank follows closely at 73rd in terms of global lending metrics.
During the two-day event, officials reflected on the ambition that the scale and size of these banks play a crucial role in the journey toward ‘Viksit Bharat’—a vision for India to evolve into a developed nation by 2047. The emphasis was on achieving this growth organically, rather than through mergers or acquisitions, paving the way for sustainable, long-term progress.
Financial Performance Highlights
The performance metrics of public sector banks in FY25 further showcased the resilience and potential within the banking sector. Collectively, these banks generated an impressive profit of Rs 1.78 lakh crore, marking a 26% growth from the previous fiscal year. The SBI alone accounted for over 40% of this total profit, reaching Rs 70,901 crore—a 16% increase compared to the Rs 61,077 crore recorded in FY24.
A closer look at the profits reveals a remarkable growth trajectory. Punjab National Bank led in percentage growth, achieving a staggering 102% increase in net profit, which reached Rs 16,630 crore. Similarly, Punjab & Sind Bank recorded a 71% rise to Rs 1,016 crore.
| Public Sector Banks | FY24 Profit (Rs Crore) | FY25 Profit (Rs Crore) | Growth (%) |
|---|---|---|---|
| State Bank of India | 61,077 | 70,901 | 16 |
| Punjab National Bank | 8,225 | 16,630 | 102 |
| Punjab & Sind Bank | 594 | 1,016 | 71 |
| Total PSB Profit | 1,41,000 | 1,78,364 | 26 |
Banking Sector Challenges and Opportunities
Discussions during the PSB Manthan also emphasized the critical need for banks to improve their operational autonomy. Securing increased decision-making power for bank boards was highlighted as a pathway to enhance efficiency in pursuing commercial objectives. These conversations are vital considering that previous reforms aimed at revitalizing public sector banks have already laid a foundation that could be built upon.
Another essential topic was improving the quality of assets within the banking system. The Reserve Bank of India (RBI) has been pivotal in addressing non-performing assets (NPAs), following an asset quality review initiated in 2015. Although there have been promising improvements since NPAs peaked in 2018, the banking sector is urged to continually work towards maintaining a low NPA ratio.
Enhancing operations and diversifying expertise within various banking segments may prove crucial for public sector banks (PSBs) seeking to thrive in a globally competitive environment. With uncertainties looming in the global economy, banks need to adapt and think outside the box.
Technological Advancements and Customer Service
The integration of technology was also a focal point during the event, as banks face challenges such as IT infrastructure, cybersecurity, and customer service. High-ranking officials discussed methods to bolster customer service and streamline operations for a better banking experience.
Past events, such as the 2017 PSB Manthan forum, have resulted in significant reforms, including the Enhanced Access & Service Excellence (EASE) initiative. These ongoing discussions signal a commitment to enhancing customer satisfaction and operational efficiency as the banking sector continues to evolve.
To put it into context, if public sector banks do not keep pace with technological advancements and service enhancements, they risk losing market share to privately held banks that are already setting high benchmarks.
Conclusion
As India continues to lay out an ambitious roadmap for its banking sector, the discussions at PSB Manthan 2025 outline both challenges and opportunities that lie ahead. Authorities and executives from major banks are now gearing up for a new growth trajectory that aligns with the larger vision of transforming India into a globally competitive economy. The focus on improving autonomy and resource optimization, along with bolstering customer service and adopting new technologies, could set the stage for a groundbreaking transformation in the banking sector in the coming years.
In summary, while the nation has a steep hill to climb to reach its ambitious goals, the current momentum in the banking sector is promising and pivotal for India’s economic future.
Bankerpedia’s Insight 💡
India’s ambition to create two globally competitive banks marks a pivotal moment in its banking and finance sector. With current leaders like SBI and HDFC Bank showing strong profit growth, this initiative aims to elevate India’s financial infrastructure on a global scale. Such banks could enhance India’s economic resilience, attract foreign investment, and drive innovation. For consumers, this could translate to better services and financial products. As this vision unfolds, stay informed and engaged with these developments, as they may reshape your banking experience in the near future.
What Does This Mean for Me? 🤔
- Salaried Person → Potential for better banking services and salary growth.
- Business Owner → Improved banking competitiveness can benefit business financing opportunities.
- Student → Improved banking system could benefit student financial opportunities.
- Self-employed → Improved banking services for self-employed individuals expected.
- Homemaker → More competitive banks could enhance financial services available.
- Retiree / Senior Citizen → Improved banking stability and services for retirees expected.
- Job Seeker → Increased competition may create more job opportunities.
- Farmer / Rural Citizen → Increased access to competitive loans and banking services.
Research References 📚
- economictimes.indiatimes.com
- RBI
- SEBI
- Ministry of Finance
- NABARD
- Department of Financial Services (DFS)
- IMF
- World Bank
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