At PSB Manthan 2025, Govt Aims for Top 20 PSBs, Drops Merger Plans

The Finance Ministry’s PSB Manthan 2025 in New Delhi has set bold ambitions for India’s public sector banks (PSBs). Government sources confirmed that discussions aim to place at least two Indian PSBs among the world’s top 20 banks by assets—even as consolidation is off the table.

Currently, the State Bank of India (SBI) is the only PSB in the global top 50, ranked 47th by assets. To rise to the top 20, Indian PSBs must scale up, strengthen governance, embrace AI and digital banking, and expand globally.

AI in Banking: Cost or Investment?

A highlight of Manthan 2025 was the debate on artificial intelligence in banking operations. Experts and PSB leaders agreed that AI should be treated as a strategic investment, not just an expense.

AI-driven tools are expected to deliver:

• Personalized banking services

• Predictive risk management

• Operational efficiency at scale

By combining AI with digital infrastructure, PSBs can strike the right balance between automation and human touch, ensuring improved customer experience without losing the trust that defines public banking in India.

Stronger Governance and Autonomy

Corporate governance was another major theme. Participants stressed the need to restructure board composition—strengthening oversight while preserving management autonomy. This balance is seen as vital for creating globally competitive PSBs that can innovate and expand with accountability.

Credit Growth in Agriculture and MSMEs

While global ambitions grabbed headlines, the conference also prioritized domestic growth. Boosting credit in agriculture and MSMEs was identified as critical for:

• Rural development

• Job creation

• Supporting India’s entrepreneurship ecosystem

Expanding Global Footprint Amid Geopolitical Shifts

With global trade routes and capital flows being reshaped, PSBs are being encouraged to expand their international presence. New opportunities in trade finance, cross-border payments, and global project financing are expected to help Indian banks achieve the scale needed to enter the global top 20.

No Push for PSB Consolidation

In a significant clarification, government sources said consolidation is not part of the PSB Manthan 2025 agenda. Unlike earlier reform phases centered on mergers, this roadmap prioritizes:

• Organic growth

• Technology adoption

• Customer-first innovation

• Global competitiveness

Officials emphasized that strengthening PSBs individually provides a sustainable path to growth and resilience.

Towards Viksit Bharat 2047

The government’s vision to place at least two PSBs in the world’s top 20 aligns with Viksit Bharat 2047. By combining AI adoption, governance reforms, customer experience, and global expansion, India aims to position its PSBs as world leaders, not just domestic institutions.

A Defining Shift in Indian Banking

The twin takeaways from PSB Manthan 2025—an ambitious global ranking target and a clear no to consolidation—mark a paradigm shift in India’s banking reforms. The focus has decisively moved from structural mergers to innovation, technology, and strategic growth.

The message is clear: India’s PSBs must serve not only national priorities but also compete globally. PSB Manthan 2025 sets the stage for future-ready, globally competitive, and customer-centric public sector banks that will power India’s growth into 2047 and beyond.