The Business Bytes
THEBUSINESSBYTES BUREAU
NEW DELHI, JUNE 13, 2025
In the wake of the Reserve Bank of India’s (RBI) surprise rate cut aimed at reviving a slowing economy, Finance Minister Nirmala Sitharaman is set to meet the heads of all public sector banks (PSBs) on June 27 to review their financial performance and align them with the government’s economic stimulus agenda.
This high-level meeting comes shortly after the RBI slashed the policy repo rate by 50 basis points to 5.5% and cut the cash reserve ratio (CRR) by 100 basis points to 3%, a move that is expected to infuse approximately ₹2.5 lakh crore into the banking system. The CRR cut will be implemented in phases to ease liquidity pressures and spur credit growth.
Chaired by Governor Sanjay Malhotra, the RBI’s six-member Monetary Policy Committee voted 5–1 in favour of this policy easing, reflecting growing concerns about India’s economic growth, which slowed to a four-year low of 6.5% in FY25.
Against this backdrop, the Finance Minister’s meeting will focus on assessing the financial health of PSBs, setting new targets for the current fiscal year, and nudging banks to increase credit flow to productive and employment-generating sectors.
Key government schemes such as the Kisan Credit Card, Pradhan Mantri Mudra Yojana, and the trio of social security programmes — Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, and Atal Pension Yojana — will also be reviewed for their implementation and impact.
The review gains added significance as PSBs have collectively posted a stellar financial performance in FY25, reporting a record cumulative profit of ₹1.78 lakh crore, up 26% from ₹1.41 lakh crore in FY24. All 12 state-run banks ended the year in the black.
The State Bank of India (SBI), the country’s largest lender, led the profitability charts with a net profit of ₹70,901 crore, marking a 16% year-on-year growth and accounting for over 40% of total PSB profits.
