In the draft norms issued last month, the RBI said that the ultimate responsibility for the bank's performance, conduct and control rests with the Board
Yes, the entry of private bankers, particularly with global experience will add value to PSBs, points out Tamal Bandyopadhyay.
Public-sector banks (PSBs) in India have reported an 11.2 per cent year-on-year rise in net profit, reaching a record 1.98 trillion in FY26, marking their fourth consecutive year of profitability, driven by sustained business growth, improved asset quality, and strong capital positions.
Led by the country's biggest lender State Bank of India (SBI), public sector banks logged a record cumulative profit of Rs 52,603 crore in the third quarter of the current fiscal, reflecting an 18 per cent year-on-year growth.
The Indian banking sector could be due for a rise in profitability after several quarters of net interest margin (NIM) compression. The Q2FY26 results suggest NIMs have bottomed out.
'What we have to think about is, how to improve the efficiency of public sector banks.' 'You have to make decision-making more prudent, and free from government intervention.'
Each employee is generating more business than before -- driven by cost rationalisation, digital adoption, and better resource utilisation -- signalling a stronger foundation for sustainable growth and profitability.
This article examines the call for the government to reduce its majority ownership in public sector banks ostensibly with the objective of improving the functioning of these banks.
Unlike any other national asset, which is typically sold to the highest bidder, the profile of the bidder is the most important criterion for a licence to bank, and even for acquiring more than 5 per cent stake, explains Tamal Bandyopadhyay.
Finance Minister Nirmala Sitharaman on Wednesday said she has requested banks to work with all state governments to push the 'one district, one product' agenda. Banks have also been requested to have interaction with export promotion agencies, chambers of commerce and industry to understand and address the requirement of exporters on a timely manner, Sitharaman said while addressing the media in Mumbai on Wednesday.
Public-sector lenders Indian Overseas Bank (IOB) and Uco Bank are likely to raise funds through qualified institutional placement (QIP) next month. Punjab & Sind Bank is likely to follow suit later this financial year to meet the public shareholding norm of 25 per cent. When a public-sector unit raises funds through QIP, the money goes to the company because it involves issuing new shares whereas in the case of offer for sale (OFS), the money raised goes to the government because its shares are sold.
The government is open to providing more capital than that announced in the Budget.
It may sound bizarre, but incidents of public sector bankers dying by suicide could probably equal the number of such bankers quitting their jobs, reveals Tamal Bandyopadhyay.
SBI too rules out cut in base rate in short term, to launch concessional schemes.
Public-sector banks, which are the largest employers in the banking space, have seen a drop in clerical staff over the years.
Balachandran M, Director of the Institute of Banking Personnel Selection, has little time to catch his breath. He and his team have been supervising recruitment of nearly 100 public sector bank employees every day.
'We may bite the bullet and draw up plans for privatisation.' 'If that is done now, the sale of the government stake will fetch money; a delay will see erosion in whatever value is left in these banks,' says Tamal Bandyopadhyay.
They face two key challenges - manpower and capital. Sadly, these are not on the agenda for reform
Giving a pat on the back of public sector banks, Finance Minister Pranab Mukherjee on Friday said the Indian banking sector has responded well to difficult global environment by meeting credit needs of the economy.
Finance Minister Arun Jaitley said that at a time when the private sector has been somewhat conservative in investments, public investment always takes the lead.
A report by The Boston Consulting Group notes the human resource challenge for public sector banks due to large-scale retirement.
The mergers will not involve any cash but only share swaps
The Reserve Bank of India (RBI) has issued amended directions for bank boards, effective October 1, 2026, to rationalise agenda items and enable more focused engagement on strategy and risk governance, while explicitly defining matters reserved for board approval and periodically reviewing delegated powers.
Operations of public sector banks (PSBs) may be impacted as bank union AIBEA has given a strike call for Saturday to oppose incessant outsourcing of jobs. Although the officers are not part of the strike, there may be some impact on cash deposit and withdrawal, clearing of cheques etc. Several banks, including Bank of Baroda and Punjab & Sind Bank, have already informed their customers about the potential impact on services if November 19 strike materalises.
Credit cards appear to have found favour with public sector banks, which had, so far, been reluctant in expanding their unsecured loan portfolios aggressively.
In the biggest consolidation exercise in the banking space, the government on Friday announced four major mergers of public sector banks, bringing down their total number to 12 from 27 in 2017, a move aimed at making state-owned lenders global sized banks.
Since public sector banks are unlikely to be privatised soon, the aim has to be to make as many of them perform as is possible.
'The approach today is, instead of giving loans to 100 MSMEs, let us give one loan to a big-ticket corporate.' 'And so many of these big fish deceived the banks and the banks are in the doldrums now with high NPAs.'
Customers using e-commerce websites are young and techno-savvy.
Non-Performing Assets are a wake-up call for public sector banks.
'Public sector banks are like an extended arm of the government.' 'They rush to rescue certain sectors or they rush to invest in certain sectors to prop up the economy which the private banks don't.'
Foreign investors did not lap up the new SBI issue because of deeper worries about public sector banks
The finance ministry is not only keen to split the roles of CMD, but also wants to appoint them for a fixed tenure of five years.
A number of public sector banks will have to stock up on core capital, if the Reserve Bank of India decides to ask banks to leave out hybrid instruments while computing Tier-I capital adequacy, as indicated by RBI last week.
Typically, those from the IIMs, Xavier Labour Relations Institute and Indian School of Business joined at Scale III, but graduates from other B-schools were recruited in scale II.
A major reshuffle in the top brass of nationalised banks is on the cards, with the finance ministry's banking division scheduled to hold interviews for the posts of five chairpersons on January 24.
