Public Sector banks (PSU banks) form the backbone of India’s financial system, playing a pivotal role in driving economic growth, financial inclusion, and socio-economic development. Often referred to as government banks in India or nationalised banks in India, these institutions are majority-owned by the government, ensuring stability, accessibility, and trust for millions of customers. As of 2025, there are 12 public sector banks in India, following significant mergers to enhance efficiency and financial strength. This article explores the landscape of govt banks in India, provides a comprehensive list of government banks in India, and highlights their services, contributions, and challenges, making it a valuable resource for understanding the national bank list and the role of government banks.
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What are Public Sector Banks?
Public sector banks (PSU banks) are financial institutions where the Government of India or the Ministry of Finance holds a majority stake, typically over 50%. Regulated by the Reserve Bank of India (RBI), these banks operate with a focus on public welfare, offering affordable financial services to individuals, businesses, and rural communities.
Unlike private banks, which prioritize profit, government banks in India aim to promote financial inclusion, support government schemes, and stabilize the economy. The history of nationalised banks in India began with the nationalization of the Imperial Bank of India in 1955, forming the State Bank of India (SBI). Subsequent nationalizations in 1969 (14 banks) and 1980 (6 banks) expanded the reach of govt banks in India, bringing 90% of the banking sector under government control by 1991.
Key Features of Public Sector Banks
Public sector banks are distinguished by their accessibility, reliability, and commitment to social welfare. Key features include:
- Government-Backed Security: Deposits are secure due to government ownership, fostering public trust.
- Extensive Networks: Vast branch and ATM networks, with SBI alone operating over 22,542 branches and 65,000+ ATMs.
- Affordable Services: Low-cost banking, competitive loan rates, and minimal fees compared to private banks.
- Financial Inclusion: Support for schemes like Pradhan Mantri Jan Dhan Yojana (PMJDY), Mudra Yojana, and Kisan Credit Cards.
- Rural Outreach: Strong presence in rural and semi-urban areas, promoting banking access for underserved communities.
- Digital Banking: Increasing adoption of mobile apps, net banking, and UPI, though slower than private banks.
These features make government banks a trusted choice for millions, especially in rural and economically weaker sections.
Role of Government Banks in India’s Economy
Govt banks in India are instrumental in shaping the nation’s economic landscape. Their contributions include:
- Financial Inclusion: Over 44 crore Jan Dhan accounts and ₹13.65 lakh crore in Mudra loans, expanding banking access to the unbanked.
- Economic Stability: Managing over 60% of India’s banking assets, with ₹116 lakh crore in deposits and ₹92 lakh crore in advances.
- Support for MSMEs and Agriculture: Providing loans, microfinance, and Kisan Credit Cards to farmers and small businesses.
- Implementation of Government Schemes: Facilitating programs like PMJDY, Atal Pension Yojana, and Stand-Up India.
- International Presence: Banks like SBI and Bank of Baroda operate globally, supporting NRI banking and foreign trade.
Their dominance in market share (72.9% vs. 19.7% for private banks) underscores their critical role in India’s financial system.
List of Government Banks in India 2025
As of April 2025, there are 12 public sector banks in India, reduced from 27 due to mergers announced in 2019 by Union Finance Minister Nirmala Sitharaman to improve efficiency and financial health. Below is the updated national bank list of government banks in India, including their establishment years, headquarters, and key details:
| Bank Name | Established | Headquarters | Branches (Approx.) | ATMs (Approx.) | Government Shareholding (%) | Key Services |
|---|---|---|---|---|---|---|
| State Bank of India (SBI) | 1955 | Mumbai, Maharashtra | 22,542 | 65,627 | 57.59 | Retail, Corporate, Digital Banking, NRI Services |
| Punjab National Bank (PNB) | 1895 | New Delhi | 10,108 | 12,455 | 73.15 | Retail, Corporate, Wealth Management, Agri Loans |
| Bank of Baroda (BoB) | 1908 | Vadodara, Gujarat | 8,185 | 11,535 | 63.97 | Retail, SME, NRI, International Banking |
| Union Bank of India | 1919 | Mumbai, Maharashtra | 8,400+ | 9,000+ | 74.76 | Retail, MSME, Women Entrepreneur Loans |
| Canara Bank | 1906 | Bengaluru, Karnataka | 8,500+ | 10,000+ | 62.93 | Retail, SME, Agri Loans, Digital Banking |
| Bank of India (BoI) | 1906 | Mumbai, Maharashtra | 5,100+ | 5,000+ | 73.38 | NRI, Corporate, Retail, Forex Services |
| Indian Bank | 1907 | Chennai, Tamil Nadu | 5,847 | 4,937 | 73.60 | Retail, MSME, Rural Banking |
| Central Bank of India | 1911 | Mumbai, Maharashtra | 4,500+ | 4,000+ | 93.08 | Retail, Education Loans, Rural Development |
| Indian Overseas Bank (IOB) | 1937 | Chennai, Tamil Nadu | 3,200+ | 3,000+ | 96.38 | NRI, Export Financing, Retail Banking |
| UCO Bank | 1943 | Kolkata, West Bengal | 4,000+ | 2,000+ | 95.39 | Retail, Microfinance, Corporate Solutions |
| Bank of Maharashtra | 1935 | Pune, Maharashtra | 2,000+ | 2,000+ | 86.46 | Retail, SME, Agri Financing |
| Punjab & Sind Bank | 1908 | New Delhi | 1,500+ | 1,000+ | 98.25 | Retail, Rural Banking, MSME Loans |
Note: Branch and ATM numbers are approximate and based on the latest available data from 2025. Government shareholding is as of September 2024.
Mergers of Public Sector Banks
In 2019, the government announced a mega-merger to consolidate PSU banks, reducing their number from 27 to 12 by April 2020. The mergers aimed to enhance operational efficiency, reduce costs, and improve risk management. Key mergers include:
- Bank of Baroda merged with Vijaya Bank and Dena Bank.
- Punjab National Bank merged with Oriental Bank of Commerce and United Bank of India.
- Canara Bank merged with Syndicate Bank.
- Union Bank of India merged with Andhra Bank and Corporation Bank.
- Indian Bank merged with Allahabad Bank.
- State Bank of India merged with its associate banks and Bharatiya Mahila Bank in 2017.
These mergers created stronger institutions with larger branch networks and improved financial stability, positioning government banks to compete with private and foreign banks.
Top Government Banks in India 2025
Based on market capitalization, assets, and market presence, the following are the top government banks in India for 2025:
- State Bank of India (SBI): The largest government bank, with a market cap of ₹667,873.94 crore and 23% market share. It reported a 28% profit jump to ₹18,331 crore in Q2 2024.
- Punjab National Bank (PNB): Second-largest, with a market cap of ₹117,984.63 crore and assets of ₹8 trillion. Known for retail, corporate, and agricultural banking.
- Bank of Baroda (BoB): Third-largest, with a market cap of ₹117,984.63 crore, operating in 24 countries and supporting financial inclusion schemes.
- Union Bank of India: Fourth-largest, with a market cap of ₹90,992.56 crore, known for women-focused products like Nari Shakti.
- Canara Bank: Fifth-largest, with a market cap of ₹87,332.30 crore, offering robust digital banking and SME financing.
These banks lead the national bank list due to their extensive outreach, financial strength, and innovative services.
Advantages of Public Sector Banks
Public sector banks offer several advantages that make them a preferred choice for many customers:
- Trust and Stability: Government ownership ensures deposit security and customer trust.
- Affordable Rates: Competitive interest rates on savings, fixed deposits, and loans, especially for agriculture and education.
- Rural Access: Extensive branch networks in rural areas, unlike private banks’ urban focus.
- Government Schemes: Direct access to initiatives like PMJDY, Mudra, and Atal Pension Yojana.
- Low-Cost Services: Minimal fees for transactions, account maintenance, and digital banking.
Challenges Faced by Government Banks
Despite their strengths, govt banks in India face several challenges:
- Non-Performing Assets (NPAs): High NPAs from loan defaults impact profitability.
- Digital Lag: Slower adoption of advanced technology compared to private banks.
- Rural Losses: Operating branches in low-profit rural areas leads to financial strain.
- Bureaucracy: Government control can result in slower decision-making and inefficiencies.
- Competition: Growing competition from private banks and fintech companies offering faster, tech-driven services.
Addressing these challenges requires modernization, improved risk management, and enhanced digital infrastructure.
FAQs About Public Sector Banks in India
What are public sector banks?
Public sector banks are government-owned banks where the Government of India holds over 50% of shares, focusing on public welfare and financial inclusion.
How many government banks are there in India in 2025?
As of April 2025, there are 12 government banks in India, reduced from 27 after mergers in 2020.
Which is the largest government bank in India?
State Bank of India (SBI) is the largest government bank, with over 22,542 branches, 65,627 ATMs, and a market cap of ₹667,873.94 crore.
What is the difference between public sector banks and private banks?
PSU banks are government-owned, focusing on public welfare, while private banks are owned by individuals or corporations, prioritizing profit and innovation.
Which banks were merged in 2020?
Key mergers include Bank of Baroda with Vijaya and Dena Banks, Punjab National Bank with Oriental Bank and United Bank, Canara Bank with Syndicate Bank, and Union Bank with Andhra and Corporation Banks.
Conclusion
Public sector banks remain the cornerstone of India’s banking system, offering stability, accessibility, and trust to millions of customers. The list of government banks in India for 2025 includes 12 robust institutions, such as State Bank of India, Punjab National Bank, and Bank of Baroda, which dominate with over 60% of banking assets.
Despite challenges like NPAs and digital transformation, govt banks in India continue to drive financial inclusion, support government schemes, and foster economic growth. For detailed information, visit the RBI website (www.rbi.org.in) or official bank websites.
This comprehensive guide to nationalised banks in India serves as a valuable resource for understanding their critical role in shaping India’s financial future.
