No proposal for merger or disinvestment of public sector banks: Govt

New Delhi, Dec 2 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 for Finance, Pankaj 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.

Further, recovery in written-off loans is an ongoing process, and banks continue pursuing their recovery actions initiated against borrowers under the various recovery mechanisms available to them.

The minister further said that the RBI has advised lenders to submit the list of wilful defaulters to all Credit Information Companies (CICs) on a monthly basis, and CICs are required to display the same on their respective websites. The details of wilful defaulters of Rs 25 lakh and above is available in the public domain and can be accessed at the following URL of credit information companies, registered with and regulated by the RBI.

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