FinMin for creation of two globally competitive banks as part of Viksit Bharat vision

New Delhi, Sep 12 (PTI) India aims to establish two globally competitive banks, with assets that would rank them among the top 20 lenders in the world as part of its 'Viksit Bharat 2047' vision to become a developed nation, according to a senior official.

The issue of globally competitive banks was deliberated during the first day of the two-day-long PSB Manthan 2025, organised by the Department of Financial Services here, he added.

Currently, the country's largest lender State Bank of India (SBI), is the 43rd in the world in terms of assets, while private sector lender HDFC Bank is the second Indian bank to appear in the top 100 largest banks at 73rd place.

One of the key points discussed was how to make at least two banks globally competitive and that too organically, the official said.

India needs its two banks in the top 20 list, and the scale and size have to be achieved as part of the Viksit Bharat journey, the official added.

Asked if the consolidation of public sector banks was also discussed, the official said there was no discussion on the topic.

The meeting was chaired by the Department of Financial Services (DFS) Secretary M Nagaraju, along with other senior ministry officials and top executives of public sector banks, including State Bank of India Chairman CS Setty and Punjab National Bank CEO Ashok Chandra.

During the first day, the MD and CEO and top management of the public sector banks were addressed by Chief Economic Adviser V Anantha Nageswaran, RBI Deputy Governor Swaminathan J, former DFS Secretary and ex-IRDAI Chairman Debasish Panda and MDI Gurgaon director Arvind Sahay, among others.

There were discussions about readying PSBs for the next phase of growth, keeping in mind the goal of 'Viksit Bharat' by 2047.

The latest round of PSB Manthan is being held in the backdrop of PSU banks' cumulative profit rising to a record level of Rs 1.78 lakh crore in the fiscal year ended March 2025, a growth of 26 per cent over the previous year.

All 12 public sector banks had earned a total profit of Rs 1.41 lakh crore in FY24.

The year-on-year increase in profit in absolute terms rose by about Rs 37,100 crore in FY25.

Out of the total profit of Rs 1,78,364 crore earned during FY25, market leader State Bank of India (SBI) contributed over 40 per cent of the total earnings. SBI logged a net profit of Rs 70,901 crore in FY25, 16 per cent higher than the previous fiscal (Rs 61,077 crore).

In percentage terms, Delhi-based Punjab National Bank reported the highest net profit growth of 102 per cent to Rs 16,630 crore, followed by Punjab & Sind Bank with a 71 per cent rise to Rs 1,016 crore.

The official further said there was deliberation on further improving the autonomy of banks' boards to achieve efficiency in terms of making commercial decisions.

During the meeting, a host of other topics related to the banking sector were also discussed, including the effect of reform measures taken by the government in the last few years.

To address the issue of stress in the banking system, the Reserve Bank of India initiated an asset quality review in 2015, resulting in non-performing assets peaking in 2018 and declining thereafter.

However, there is still scope for further improving the asset quality, and efforts must be made by banks to keep the NPA ratio low, the official added.

Diversifying operations to gain expertise in other segments of the banking sector may also help PSU banks to become globally relevant and gain prominence, especially amid global uncertainties, the official pointed out.

Challenges related to information technology, cyber-security, customer service and grievance handling were also deliberated upon.

Previously, the finance ministry had organised a similar event in 2017, and the idea of Enhanced Access & Service Excellence (EASE) reforms was mooted during that PSB Manthan.

The last such Manthan was held in April 2022, with the entire leadership of PSBs under the guidance of the DFS to take EASE reforms to the next level.

In the last manthan, six working groups were formed to look into the functioning of public sector banks (PSBs) and suggest ways to improve customer service, digitisation, HR incentives, corporate governance and collaboration. PTI DP BAL BAL