The government is currently not considering any proposals regarding the merger or disinvestment of public sector banks (PSBs), as stated in Parliament on Tuesday.

In response to a query in the Rajya Sabha about the government’s intentions to disinvest four PSBs or merge them with larger banks by 2026, Minister of State for Finance, Pankaj Chaudhary, remarked, “At this moment, no plans for the merger or disinvestment of Public Sector Banks (PSBs) are being contemplated by the Government.”

There have been reports suggesting that the government is formulating a plan for consolidating PSBs, which might reduce the number of state-owned banks from 12 to merely four by FY27. This proposal is said to aim at enhancing balance sheets, increasing operational efficiency, and establishing competitive global banking institutions.

Chaudhary also informed the house that the gross non-performing assets (NPAs) ratio in public sector banks (PSBs) has decreased from 9.27 percent in March 2016 to 2.58 percent in March 2025, and further to 2.51 percent in June 2025.

In the same vein, the slippage ratio, which indicates the fresh addition of NPAs as a percentage of standard advances, has fallen from 7.5 percent in March 2016 to 1.0 percent in March 2025, and subsequently to 0.9 percent in June 2025, he added.

Moreover, the recovery of written-off loans is a continuous process, and banks are actively engaging in their recovery efforts against borrowers through various available recovery mechanisms.

The minister also mentioned that the RBI has instructed lenders to provide the list of wilful defaulters to all Credit Information Companies (CICs) monthly, and these CICs are obligated to showcase the information on their websites.

The records of wilful defaulters with dues of Rs 25 lakh and above are publicly accessible at the URLs of credit information companies accredited and regulated by the RBI.