India’s banking ecosystem comprises 12 public sector banks, 21 private sector banks, and 11 small finance banks. In 2024, the total assets of the public and private banking sectors were recorded at Rs. 161.2 lakh crore and Rs. 109.5 lakh crore, respectively. Public sector banks contributed to around 59.5 percent of the total banking assets, which include public, private, and foreign banks.

Foreign institutional investors (FIIs) have been steadily increasing their holdings in public sector banks (PSU banks) through the September 2025 quarter, reflecting a renewed sense of confidence in state-owned lenders. Shareholding data indicates that FIIs expanded their exposure across almost all major PSU banks, including Bank of Baroda, Canara Bank, and the State Bank of India.

Reports suggest that

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