Gross NPAs of public sector banks fall to historic low of 1.9 per cent, net profit at record high
New Delhi, July 28 (IANS) The financial health of public sector banks has shown significant improvement with healthy balance sheets, historically high profits and multi-decadal low levels of gross non-performing assets (GNPAs), the Parliament was informed on Tuesday.
Gross Non-Performing Assets (GNPA) of public sector banks have fallen to a historic low of 1.9 per cent in FY 2025–26, they have also achieved the highest-ever net profit of Rs 1.98 lakh crore, and aggregate business has crossed the Rs 283 lakh crore mark, according to data tabled by Minister of State for Finance Pankaj Chaudhary in a written reply to a question in the Rajya Sabha.
The credit growth of public sector banks has accelerated across key Sectors in FY 2025-26, with MSME and retail loans registering a robust growth of 19.6 per cent and 19.8 per cent, respectively. Credit to the agriculture sector has surged by 16.2 per cent, the figures showed.
The minister further stated that the government introduced the Emergency Credit Line Guarantee Scheme (ECLGS 5.0) in May 2026 to tide over any short-term liquidity mismatches faced by businesses due to the West Asia crisis. The scheme provides guarantee coverage to Member Lending Institutions (MLIs) through National Credit Guarantee Trustee Company Limited (NCGTC) for the amount in default under the additional credit facility extended to the eligible borrowers. The scheme provides 100 per cent guarantee coverage for MSMEs and 90 per cent guarantee coverage for non-MSMEs and the scheduled passenger airline sector, up to a credit flow of Rs 2,55,000 crore, which includes Rs 5,000 crore specifically earmarked for the scheduled passenger airline sector.
Under ECLGS 5.0, borrowers in the airline sector are eligible for assistance of up to 100 per cent of their total peak credit outstanding during the fourth quarter of FY 2025–26. The maximum loan amount available under ECLGS 5.0 for the airline sector is Rs 1,500 crore per borrower (of this, any amount beyond Rs 1,000 crore and up to Rs 1,500 crore shall be permitted only with a proportionate equity contribution from the promoters, the minister added.
–IANS
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