PSU banks now competing strongly with private and foreign lenders: Piyush Goyal

Public sector banks in India have undergone a significant transformation and are now competing effectively with private and foreign lenders, Union Commerce and Industry Minister Piyush Goyal said while addressing the MSME Banking Excellence Awards. He noted that sustained banking reforms, improved governance, and a renewed focus on customer-centric lending have strengthened the position of public sector banks (PSBs) in the financial ecosystem.

Goyal highlighted that public sector banks, once burdened by high non-performing assets and limited lending appetite, have emerged as robust institutions capable of supporting economic growth. He attributed this turnaround to measures such as recapitalisation, improved credit discipline, digital transformation, and enhanced accountability frameworks. According to him, these reforms have enabled PSBs to compete on equal footing with private and foreign banks, particularly in areas of credit delivery and service efficiency.

The Minister emphasised the critical role of PSBs in supporting India’s Micro, Small and Medium Enterprises (MSME) sector. He said banks have expanded credit access to MSMEs through simplified loan processes, data-driven credit assessments, and government-backed guarantee schemes. These efforts, he noted, have helped small businesses recover from pandemic-related disruptions and contribute more meaningfully to employment generation and economic resilience.

Goyal also pointed out that public sector banks are increasingly leveraging technology to improve turnaround times, risk assessment, and customer engagement. Digital onboarding, faster loan approvals, and end-to-end online servicing have enhanced their competitiveness and improved borrower confidence.

He further stated that India’s banking sector is now well-positioned to meet the growing demands of a rapidly expanding economy. With stronger balance sheets and prudent risk management practices, PSBs are expected to play a pivotal role in financing infrastructure, manufacturing, exports, and entrepreneurship.

The Minister concluded by underscoring that a healthy, competitive banking environment—where public, private, and foreign lenders coexist—will be essential for sustaining long-term economic growth and financial inclusion in India.

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