Finance Minister Sitharaman to Review PSU Banks FY25 Performance on May 15

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Finance Minister Sitharaman to Review PSU Banks’ FY25 Performance on May 15

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On May 15, Finance Minister Nirmala Sitharaman is set to hold an important review meeting to assess the financial performance of public sector banks (PSBs) for the financial year 2024-25. The meeting will bring together managing directors from all PSBs, along with the chairman of the State Bank of India (SBI), Financial Services Secretary M. Nagaraju, and key officials from the Department of Financial Services (DFS).

Earlier on May 8, 2025, Shri M. Nagaraju, Secretary of the Department of Financial Services (DFS), convened a high-level meeting to assess the progress of Public Sector Banks (PSBs) in resolving pending cases at the National Company Law Tribunal (NCLT). The meeting aimed to enhance the efficiency of the insolvency resolution process under the Insolvency and Bankruptcy Code (IBC).

What Will Be Discussed in meeting by FM?

As per the sources, the main focus of the review will be on the financial results for FY25. However, it won’t just cover the financial aspects. The meeting will also discuss the performance of PSBs in areas like:

Business Growth: How well the banks are expanding and performing.
Recoveries: Efforts made by banks in recovering bad loans and improving their financial position.
Digital Banking: The progress made in digital banking services and how well these services are meeting customer needs.
Financial Inclusion: How PSBs are contributing to financial inclusion through initiatives like the Jan Dhan Yojana and PM SVANidhi schemes.

This review comes after the government’s Operation Sindoor, which focused on improving cybersecurity across public sector banks. This is the first formal performance check of PSBs since those cybersecurity efforts were put in place.

Assessing the Bigger Picture

Apart from financial results, the review will also look at how each bank is working to enhance its credit outreach, digital financial services, and inclusion efforts. The performance of the banks in tackling bad loans will also be discussed, ensuring that recovery efforts are on track.

Finance Minister Sitharaman is likely to encourage banks to improve their governance, risk management, and lending practices. This is especially important given the global economic uncertainties and ongoing tensions in international markets.

The review follows a period of strong performance by PSBs. Between April and December 2024, public sector banks reported record net profits of Rs 1.29 lakh crore, reflecting a 31.3% increase compared to the same period last year. The total operating profit for the 12 state-owned banks stood at Rs 2.20 lakh crore.

This exceptional performance can be attributed to several factors, including improved asset quality, a decrease in non-performing assets (NPAs), and a stronger capital base, which was supported by both internal savings and fundraising from the market.

One official said, “Public sector banks have shown significant improvement in their operational efficiency, risk management, and digital adoption, which has led to sustained profitability.”

The May 15 review meeting will be crucial in determining how PSBs can maintain their strong performance while focusing on areas like digital growth, financial inclusion, and overall risk management in a changing global landscape.