Modi Govt extremely cautious about banking sector stability: FM

Finance Minister Nirmala Sitharaman said on Tuesday that banks no longer come to the government now with recapitalisation requests and are professionally run.

"Their metrics are healthy and they can go to the market and raise funds. The relationship between banks with the government as mai-baap— that I will take money from the finance ministry and operate despite all the negatives — no longer prevails," said Sitharaman during her reply to the Banking Law Amendment Bill, 2024, which was passed in the Lok Sabha today.

"Since 2014, we have been extremely cautious that banks remain stable. Our intention is to keep our banks safe, stable and healthy, and over the 10 years everyone is seeing the outcome, which in turn is benefiting the economy," she said.

"Indian banks have performed exceptionally well in recent years. The highest-ever net profit of ₹1.41 lakh crore was achieved in 2023-24 & ₹85,520 crore in the first half of 2024-25," she added.

"Today, all the Public Sector Banks have turned profitable. As a sector, the profitability of all scheduled commercial banks is at its highest in multiple decades, with the Return on Assets at 1.3% & the Return on Equity at 13.8%," Sitharaman said.

"Today, we have ₹2.37 lakh crore deposited in the PM Jan Dhan Accounts. In March 2025, the average balance of the PM Jan Dhan Accounts was ₹1,065. It has now increased to ₹4,397," she said.

"The intention of the nationalisation of banks was to reach the rural areas. In its true sense, that objective was achieved over the last 10 years through the PM Jan Dhan Yojana," she added.