Summary
The department of financial services is hosting PSB Confluence 2026 on Monday and Tuesday in New Delhi, bringing together nearly 125 senior leaders from PSBs and public financial institutions.
New Delhi: Public sector banks (PSBs) will focus on deposit mobilization and banking for youth at a two-day strategy meeting this week, as the government seeks to translate stronger PSB balance sheets into a broader customer base and greater capacity, according to two people aware of the development.
The department of financial services (DFS) will host PSB Confluence 2026 on 17-18 August in New Delhi, bringing together nearly 125 senior leaders from PSBs and public financial institutions. Union finance minister Nirmala Sitharaman is scheduled to address the gathering.
“The first day will open with ‘deposit mobilization’ followed by ‘banking for youth,’ before the discussions move to supporting the investment cycle and global capability centres,” said the first of the two persons cited above.
In his 80th Independence Day address from the Red Fort, Prime Minister Narendra Modi said India’s banking sector was flourishing and called for at least one Indian bank to rank among the world’s top five—a goal that gives added significance to the event.
The focus on deposits and youth also comes at a crucial point in the PSB turnaround. In 2025-26, PSBs reported their highest-ever combined net profit of ₹1.98 trillion, while gross non-performing assets (NPAs) fell to around 1.9%. Aggregate PSB business crossed ₹283 trillion, deposits reached ₹156.3 trillion and advances stood at ₹127 trillion. Capital adequacy strengthened to 16.6%.
Credit growth also broadened beyond traditional segments. Retail advances grew 19.8% during fiscal year 2026 (FY26); micro, small, and medium enterprise credit grew 19.6%, and agriculture and allied activities 16.2%, while infrastructure lending grew 4.9%.
Next challenge
“For PSBs, however, the next challenge is increasingly about converting that balance-sheet strength into sustainable growth. Deposit mobilization is the funding base for further credit expansion, while banking for youth is about establishing long-term relationships with a generation that is increasingly digitally native and financially active,” the first person said.
“Banks are expected to examine how products, digital journeys and credit pathways can be made more relevant to younger customers—from first salary accounts and education finance to savings, investments, entrepreneurship and responsible access to credit,” added the second person.
The deposit discussion, meanwhile, is likely to focus on strengthening the liability side of PSB balance sheets as credit demand expands. Aggregate deposits rose 10.6% year-on-year to ₹156.3 trillion in March, compared with a 15.7% growth in advances to ₹127 trillion. The faster pace of credit growth underscores the importance of securing stable funding to support the investment cycle.
The people said that the confluence is also likely to discuss supporting the investment cycle. “The discussion will also likely take place on the agriculture and horticulture value chain infrastructure, priority sector lending and reimagining credit card business,” said the first person.
Taking it forward
PSB Confluence 2026 builds on the previous PSB Manthan held in Gurugram on 12-13 September 2025. That exercise marked the policy shift from stabilization and survival towards growth, innovation and global competitiveness.
It brought together PSB leadership, regulators, economists, former regulators and senior banking professionals, with discussions centred on customer experience, governance, purposeful innovation, credit growth, risk management, workforce readiness and technology modernization.
Mint‘s queries emailed to the Union finance ministry and the DFS on Saturday afternoon remained unanswered.
“In the last few quarters cumulating in Q1FY27, PSU banks had run down on their excess statutory liquidity ratio to fund asset growth. This has almost run its full course now. Overall, investor demand for fixed-income assets seems tepid, given low deposit growth and debt mutual fund inflows. Further, PSUs and banks have lagged in deposit growth by almost 2%. Hence, the focus is on deposit growth so that PSU banks retain their market share,” said Sanjay Agarwal, senior director, CareEdge Ratings.
About the Author
Harsh Kumar
Harsh Kumar is a policy reporter at Mint (HT Media Group), where he covers the Ministry of Commerce and Industry along with key departments of the Ministry of Finance, including the Department of Economic Affairs (DEA) and the Department of Financial Services (DFS). With over five years of experience in business and economic journalism, he has developed strong expertise in tracking policy developments and their wider economic impact.
He has previously worked with Business Standard, Moneycontrol, and Outlook Money, where he reported extensively on banking, financial services, and the broader economy. Over the years, he has built a reputation for delivering accurate, insightful, and impactful stories, supported by a keen eye for detail and a consistent track record of breaking exclusive news.
An alumnus of Jamia Millia Islamia, Harsh closely follows regulatory changes and key economic trends shaping India’s financial and industrial landscape. His reporting aims to simplify complex policy issues for a wider audience while maintaining depth and credibility.
Outside of work, he enjoys tracking policy developments, finding scoops, and travelling, reflecting his curiosity about how economic decisions shape everyday life.
