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In a point-by-point rebuttal to Samajwadi Party supremo Akhilesh Yadav, the finance ministry on Friday said that public sector banks (PSBs) recorded their highest-ever net profit of ₹1.98 lakh crore in the financial year 2025-26 with continued government interventions and banking reforms.

It has also led to a decline in their gross non-performing assets (GNPA) to 1.93 per cent, the lowest level in several decades, the finance ministry said in a post on X.

The long post from the ministry came in response to Yadav's allegation that the government has made banking worse than even a moneylender.

Yadav, on Thursday, criticised the BJP-led government over its handling of banking reforms since 2014, raising a series of questions on issues ranging from minimum-balance penalties, demonetisation and service charges to loan waivers, demonetisation, access to credit and the treatment of bank employees.

In a rebuttal on minimum-balance penalties, the finance ministry said, keeping the objective of financial inclusion in mind and moving towards a customer-centric banking system, most public sector banks have either waived or reduced charges for non-maintenance of minimum balances in their regular savings accounts.

Regarding the conduct of recovery agents, the Reserve Bank of India (RBI) has explicitly stated that they cannot intimidate, threaten or harass customers, it said.

To ensure access to banking services for every citizen, banking service centres have been established within a five-kilometre radius, connecting all villages in the country to banking outlets, it said.

On demonetisation, the ministry said, it was an economic decision considered crucial for curbing black money, counterfeit currency and illegal cross-border financing.

It helped bring a greater volume of transactions within the formal financial system and also encouraged the adoption of digital payment methods such as UPI, it said.

By formalising economic activity and expanding digital infrastructure, demonetisation helped connect India's vast informal economy with the formal banking system, promoting long-term transparency, it added.

On the allegation that valuable metals, investment certificates, and other heirlooms from people's bank lockers have started disappearing, the ministry said that loss of items stored in bank lockers is an exceptional occurrence. If a loss occurs due to deficiencies in the bank's services, the bank is liable to compensate the customer.

Under the current RBI rules, compensation can be up to 100 times the annual locker rent, it said.

The finance ministry further said there has been improvement in banks' financial health reflecting the impact of regulatory changes, governance measures and structural reforms undertaken by the government over the past 12 years.

The reforms had improved banks' balance sheets, strengthened credit discipline and risk management, expanded access to banking services and enhanced customer service, it said.

As of March 31, 2026, the GNPA ratio of public sector banks had fallen to 1.93 per cent, while their total business reached Rs 283 lakh crore in FY26, it said.

The government has undertaken a series of measures under the Enhanced Access and Service Excellence (EASE) agenda and other governance initiatives to improve the operational efficiency and financial performance of public sector banks.

The ministry also highlighted the role of financial inclusion initiatives, including the Pradhan Mantri Jan Dhan Yojana (PMJDY), in expanding access to formal banking services.

More than 59 crore Jan Dhan accounts have been opened since the scheme's launch in August 2014. These accounts do not require a minimum balance, and customers are not penalised for maintaining a zero balance, it said.

It also highlighted government schemes aimed at providing credit to farmers, small businesses, street vendors, artisans and entrepreneurs.

These include the Pradhan Mantri Mudra Yojana, Kisan Credit Card, PM SVANidhi, PM Vishwakarma and Stand-Up India.

Under the Pradhan Mantri Mudra Yojana, more than 59 crore loan accounts have received credit worth over Rs 43 lakh crore, the ministry said.

The government has also introduced measures to improve digital banking security, including transaction alerts, two-factor authentication and mechanisms to report and address cyber financial fraud.

Customers can report digital financial fraud through the national helpline number 1930, while the Citizen Financial Cyber Fraud Reporting and Management System helps coordinate action to block fraudulent transactions through the banking network, it said.

The ministry further highlighted improvements in employee welfare, recruitment transparency, digital banking, customer grievance redressal and access to affordable insurance and pension schemes.

It said the government remained committed to strengthening public sector banks through better governance, technological modernisation, improved risk management and enhanced customer service.

The Financial Inclusion Index rose from 43.4 in 2017 to 70 in 2026, reflecting the expansion of banking access and financial services, it added.

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