Khatana Hails Modi Government Banking Reforms, Defence Investment Push

Public Sector Banks Post Record ₹1.98 Lakh Crore Profit; Gross NPAs Fall to Historic Low of 1.9%, Defence Industrial Corridors See ₹70,000 Crore Investment Commitments

Hyderabad: 19, August: Senior Bharatiya Janata Party leader and Rajya Sabha Member of Parliament Engineer Gulam Ali Khatana has lauded the Modi government initiatives to strengthen the banking sector, improve the financial health of public sector banks, expand credit support for businesses and accelerate defence manufacturing, saying the reforms are yielding visible results in India’s economic and strategic sectors.

Khatana said the recent financial performance of public sector banks reflects the positive impact of the reforms and financial discipline introduced by the Modi government. During FY 2025-26, public sector banks recorded a record net profit of ₹1.98 lakh crore, while the gross non-performing assets (GNPA) ratio declined to a historic low of 1.9 per cent.

He said the total business of public sector banks has crossed ₹283 lakh crore, while credit to Micro, Small and Medium Enterprises (MSMEs) increased by 19.6 per cent and retail credit grew by 19.8 per cent, reflecting the banking sector’s expanding support to different segments of the economy.

According to Khatana, deposits with public sector banks increased from ₹107.2 lakh crore to ₹156.3 lakh crore over the past five years, while advances rose from ₹74.3 lakh crore to ₹127 lakh crore.

During the same period, net profit of public sector banks increased from ₹67,000 crore to ₹1.98 lakh crore, while the GNPA ratio declined from 7.3 per cent to 1.9 per cent. The Capital to Risk-Weighted Assets Ratio (CRAR) also improved from 14.6 per cent to 16.6 per cent, indicating stronger financial resilience in the banking sector.

Credit Support for Businesses Hit by West Asia Crisis

The Rajya Sabha MP also welcomed the measures taken by the Modi government to support businesses affected by the West Asia crisis. He said Emergency Credit Line Guarantee Scheme 5.0, launched in May 2026, aims to provide overall credit support of ₹2.55 lakh crore.

Under the scheme, 100 per cent guarantee coverage has been provided for MSMEs, while 90 per cent coverage has been extended to non-MSMEs and passenger airlines, providing much-needed financial support to businesses facing difficulties due to the crisis.

₹70,000 Crore Investment Commitments in Defence Industrial Corridors

Khatana also highlighted the progress made in the defence manufacturing sector, describing it as an important outcome of the Modi government’s policy initiatives aimed at promoting self-reliance in defence production.

According to Defence Secretary Rajesh Kumar Singh, the two Defence Industrial Corridors established in Uttar Pradesh and Tamil Nadu have attracted investment commitments of around ₹70,000 crore, with nearly ₹10,000 crore already translated into actual investment on the ground.

The Uttar Pradesh Defence Industrial Corridor (UPDIC) has received investment commitments worth ₹42,057 crore, of which ₹4,409 crore has already been invested. The corridor comprises six major nodes at Kanpur, Jhansi, Lucknow, Aligarh, Agra and Chitrakoot.

Khatana said investments by major companies and institutions, including SAIL, Amitech, BrahMos Aerospace, Tata Technologies, Adani Defence and Aerospace, Bharat Dynamics Limited and Opto Electronics Factory, reflect growing confidence in India’s defence manufacturing ecosystem.

Tamil Nadu Defence Corridor Registers Major Progress

He said the Tamil Nadu Defence Industrial Corridor has received investment commitments of ₹32,699 crore, of which ₹6,446 crore has already been invested. The corridor covers five major nodes — Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli.

Khatana said a stronger banking system, improvement in asset quality, rising credit support for MSMEs and the retail sector, and large-scale investment in defence manufacturing are giving fresh momentum to the country economic growth.

He said the Modi government banking reforms, financial support for businesses and policies promoting defence manufacturing were not only strengthening the national economy but also creating new employment opportunities and advancing India’s goal of achieving self-reliance in defence production.

Khatana said the government’s policy measures had resulted in improved financial health of public sector banks, better asset quality and increased public and private investment in the defence industrial sector. He described these initiatives as significant steps towards building a strong economy, a robust banking system and a self-reliant defence sector.