No merger, no sale: PSBs stay intact
Govt rules out disinvestment plans amid falling NPAs and rising recovery efforts
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New Delhi: No proposal on merger or disinvestment of public-sector banks (PSBs) is under consideration of the government at the moment, the Parliament was informed on Tuesday. Replying to a question in the Rajya Sabha on whether the government has plans to disinvest four PSBs or to merge with larger banks by 2026, Minister of State (MoS) for Finance, Pankaj Chaudhary, ruled it out.
Chaudhary said: “Presently, no proposal on merger or disinvestment of Public Sector Banks (PSBs) is under consideration of the Government.”
There were reports claiming that the government is working on a PSB consolidation blueprint that could reduce the number of state-owned lenders from 12 to just four in FY27. The proposal reportedly planned to strengthen balance sheets, improve operational efficiency and create globally competitive banking institutions.
Chaudhary also informed the house that the gross non-performing assets (NPAs) ratio in public-sector banks (PSBs) has declined from 9.27 per cent in March 2016 to 2.58 per cent in March 2025, and further to 2.51 per cent in June.
Similarly, the slippage ratio -- fresh accretion of NPAs as a percentage of standard advances -- declined from 7.5 per cent in March 2016 to 1.0 per cent in March 2025, and further to 0.9 per cent in June 2025, he added.
