Banking

Global rating agency Fitch Ratings has affirmed the credit ratings of Punjab National Bank and Bank of Baroda, retaining a stable outlook for both lenders. The decision reflects sustained improvement in asset quality, stronger capital buffers and consistent government support for India’s public-sector banking system. Fitch noted that while challenges remain from legacy stressed assets and operating efficiency, the overall risk profile of these banks has improved meaningfully.

The Reserve Bank of India’s Monetary Policy Committee has indicated that an interest rate hike is unlikely in the near term, signaling a cautious approach as it balances inflation management with economic growth. Policymakers appear comfortable with the current monetary stance, citing moderating price pressures and resilient domestic demand. While vigilance remains high amid global uncertainty, the central bank has emphasized continuity and predictability in policy.

India does not currently have a defined roadmap for further mergers among public sector banks, Finance Minister Nirmala Sitharaman said, signaling a pause in consolidation efforts that reshaped the banking landscape in recent years. The government’s focus, she emphasized, is now on strengthening existing institutions through improved governance, credit growth, and financial inclusion rather than structural amalgamations.

Canara Bank has announced plans to raise ₹5,000 crore through a bond issuance aimed at strengthening its capital adequacy and supporting growth initiatives. The capital infusion is expected to enhance the bank’s Tier-II capital, providing greater flexibility for lending, infrastructure financing, and strategic expansion. Analysts view the move as a proactive step to reinforce financial stability and maintain regulatory compliance amid evolving asset quality and risk management requirements.

IDFC Bank has transferred ₹583 crore to the Haryana government, reflecting strong compliance with statutory obligations and a collaborative approach to state finances. The remittance, part of revenue-sharing and dividend arrangements, highlights the bank’s robust profitability and disciplined capital management. Analysts note that such transfers not only enhance the fiscal capacity of the state but also signal investor confidence in IDFC Bank’s governance and operational strength.

AU Small Finance Bank has rejected allegations of misconduct following regulatory restrictions imposed in Haryana, asserting that its operations remain compliant with applicable laws and banking norms. The lender said it is engaging with authorities to address concerns and restore normal business activity in the state. The development has drawn market attention, highlighting the heightened scrutiny facing financial institutions amid tighter oversight.

State Bank of India has announced an ambitious objective to allocate 10% of its total lending portfolio to green advances by 2030, signaling a major push toward sustainable finance. The bank plans to focus on renewable energy, energy-efficient projects, and environmentally responsible infrastructure, aligning lending practices with global ESG standards. Analysts note that this move not only positions SBI as a leader in climate-conscious banking but also reflects India’s broader commitment to sustainable development goals.

YES Bank has set an ambitious target of achieving a 1% return on assets (ROA) by FY26, signaling confidence in its ongoing turnaround strategy. The bank’s CFO highlighted efforts to optimize credit growth, improve asset quality, and enhance cost efficiency as key levers to reach this benchmark. Analysts note that the focus on sustainable profitability, disciplined risk management, and digital transformation underpins the bank’s medium-term strategy.

IDFC First Bank is under scrutiny following the discovery of a Rs 590-crore fraud affecting accounts held by the Haryana Government. Preliminary investigations suggest irregularities in fund transfers, triggering concerns over internal controls and compliance mechanisms. Banking regulators are closely monitoring the situation, while the state government has initiated its own probe.

India’s largest public sector lender, State Bank of India, is stepping up investments in startups as part of a broader strategy to deepen and modernize the MSME ecosystem. By supporting innovation-led enterprises, the bank aims to improve credit access, technology adoption, and operational efficiency for small businesses across the country. The initiative reflects a shift in how traditional lenders engage with emerging business models, recognizing startups as critical enablers of MSME growth.