UPSC Prelims Practice Questions — Secretary, Department Financial Services reviews performance of Public Sector Banks for FY 2025–26
Q1. With reference to the performance of Public Sector Banks (PSBs) reviewed for FY 2025–26 by the Department of Financial Services, consider the following:
1. The aggregate net profit of PSBs was about ₹1.98 lakh crore, the highest ever.
2. The Gross Non-Performing Assets (GNPA) ratio fell to a historic low of 1.93%.
3. The Net Non-Performing Assets (NNPA) ratio stood at 0.39%.
4. FY 2025–26 was the second consecutive year of PSB profitability.
Which of the above is/are correctly identified?
- The aggregate net profit of PSBs was about ₹1.98 lakh crore, the highest ever.
- The Gross Non-Performing Assets (GNPA) ratio fell to a historic low of 1.93%.
- The Net Non-Performing Assets (NNPA) ratio stood at 0.39%.
- FY 2025–26 was the second consecutive year of PSB profitability.
- A. 1, 2 and 3
- B. 1 and 4
- C. 2, 3 and 4
- D. 1, 2, 3 and 4
Q2. With reference to the capital position of Public Sector Banks (PSBs) as reported around FY 2025–26, consider the following:
1. The aggregate Capital to Risk-weighted Assets Ratio (CRAR) improved to 16.6% as on 31 March 2026.
2. PSBs raised about ₹50,551 crore of capital during FY 2025–26.
3. The regulatory minimum CRAR requirement applicable to PSBs is 11.5%.
4. The CRAR of PSBs rose to 15.46% by December 2025 from 11.45% in March 2015, an improvement of about 250 basis points.
Which of the above is/are NOT correct?
- The aggregate Capital to Risk-weighted Assets Ratio (CRAR) improved to 16.6% as on 31 March 2026.
- PSBs raised about ₹50,551 crore of capital during FY 2025–26.
- The regulatory minimum CRAR requirement applicable to PSBs is 11.5%.
- The CRAR of PSBs rose to 15.46% by December 2025 from 11.45% in March 2015, an improvement of about 250 basis points.
- A. 1 only
- B. 4 only
- C. 2 and 3
- D. 3 and 4
Q3. In the multi-year clean-up of Public Sector Bank balance sheets, the Gross Non-Performing Assets (GNPA) ratio of PSBs touched its highest-ever level in which one of the following periods?
- A. March 2015
- B. March 2018
- C. September 2024
- D. March 2021
Q4. The Asset Quality Review (AQR), which compelled banks to transparently recognise stressed loans as Non-Performing Assets and led to the 2018 peak in gross NPAs, was initiated by which one of the following?
- A. Department of Financial Services
- B. Reserve Bank of India
- C. Securities and Exchange Board of India
- D. Insolvency and Bankruptcy Board of India
Q5. The nationalisation of 14 major commercial banks in 1969 was carried out by which one of the following?
- A. The Reserve Bank of India
- B. The Government of India
- C. The State Bank of India
- D. The Banking Regulation Board
Q6. With reference to the nationalisation of banks in India, consider the following statements:
1. In 1969, fourteen major commercial banks were nationalised.
2. In 1980, six more banks were nationalised.
3. After the 1980 nationalisation, about 91% of banking business came under Public Sector Banks.
4. The 1969 nationalisation covered banks with deposits below a specified cut-off size.
Which of the above is/are NOT correct?
- In 1969, fourteen major commercial banks were nationalised.
- In 1980, six more banks were nationalised.
- After the 1980 nationalisation, about 91% of banking business came under Public Sector Banks.
- The 1969 nationalisation covered banks with deposits below a specified cut-off size.
- A. 1 and 2
- B. 4 only
- C. 3 and 4
- D. 2 only
Q7. With reference to the mega consolidation of Public Sector Banks effective 1 April 2020, consider the following:
1. Oriental Bank of Commerce and United Bank of India were merged into Punjab National Bank.
2. Syndicate Bank was merged into Canara Bank.
3. Andhra Bank and Corporation Bank were merged into Union Bank of India.
4. Allahabad Bank was merged into Bank of Baroda.
Which of the above is/are NOT correct?
- Oriental Bank of Commerce and United Bank of India were merged into Punjab National Bank.
- Syndicate Bank was merged into Canara Bank.
- Andhra Bank and Corporation Bank were merged into Union Bank of India.
- Allahabad Bank was merged into Bank of Baroda.
- A. 4 only
- B. 1 and 3
- C. 2 and 4
- D. 3 only
Q8. Comparing the 2019 and 2020 rounds of Public Sector Bank amalgamation, consider the following statements:
1. The Vijaya Bank–Dena Bank–Bank of Baroda merger, effective April 2019, was India's first three-way merger of PSBs.
2. The 2020 round of amalgamations reduced the total number of PSBs from 27 to 12.
3. Unlike the 2019 merger, the 2020 amalgamations were made effective from 1 April 2021.
Which of the statements given above is/are correct?
- The Vijaya Bank–Dena Bank–Bank of Baroda merger, effective April 2019, was India's first three-way merger of PSBs.
- The 2020 round of amalgamations reduced the total number of PSBs from 27 to 12.
- Unlike the 2019 merger, the 2020 amalgamations were made effective from 1 April 2021.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q9. With reference to the Government's 4R strategy for cleaning up Public Sector Bank balance sheets, consider the following statements:
1. The 4R strategy comprises Recognition, Resolution, Recapitalisation and Reforms.
2. Recapitalisation of PSBs over four financial years totalled about ₹3.12 lakh crore, including ₹2.46 lakh crore infused by the Government.
3. The reduction in NPAs was achieved exclusively through Government recapitalisation, with no contribution from resolution under the IBC.
Which of the statements given above is/are correct?
- The 4R strategy comprises Recognition, Resolution, Recapitalisation and Reforms.
- Recapitalisation of PSBs over four financial years totalled about ₹3.12 lakh crore, including ₹2.46 lakh crore infused by the Government.
- The reduction in NPAs was achieved exclusively through Government recapitalisation, with no contribution from resolution under the IBC.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q10. With reference to the institutional framework for resolving stressed assets, consider the following statements:
1. The Insolvency and Bankruptcy Code was enacted in 2016 to provide a time-bound resolution framework.
2. NARCL, incorporated in 2021, was set up to aggregate and resolve stressed assets, primarily accounts above ₹500 crore each.
3. The Security Receipts issued by NARCL are backed by a guarantee of the Reserve Bank of India.
Which of the statements given above is/are correct?
- The Insolvency and Bankruptcy Code was enacted in 2016 to provide a time-bound resolution framework.
- NARCL, incorporated in 2021, was set up to aggregate and resolve stressed assets, primarily accounts above ₹500 crore each.
- The Security Receipts issued by NARCL are backed by a guarantee of the Reserve Bank of India.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q11. EASE 8.0, the latest edition of the Public Sector Bank reforms agenda, has been anchored on four reform themes captured by which one of the following acronyms?
- A. R.I.S.E. – Risk & Resilience, Innovation, Socio-economic Impact and Excellence
- B. C.A.R.E. – Customer, Access, Resilience, Excellence
- C. S.A.F.E. – Sustainability, Access, Finance, Excellence
- D. E.A.S.E. – Efficiency, Access, Service, Empowerment
Q12. With reference to the initiatives on unclaimed financial assets, consider the following:
1. UDGAM is the RBI web portal for searching unclaimed bank deposits.
2. Bima Bharosa is the IRDAI portal for tracing unclaimed insurance amounts.
3. MITRA is the SEBI platform for tracing unclaimed mutual fund amounts.
4. The nationwide unclaimed financial assets awareness campaign 'Aapki Poonji, Aapka Adhikar' was launched from Mumbai, Maharashtra.
Which of the above is/are NOT correct?
- UDGAM is the RBI web portal for searching unclaimed bank deposits.
- Bima Bharosa is the IRDAI portal for tracing unclaimed insurance amounts.
- MITRA is the SEBI platform for tracing unclaimed mutual fund amounts.
- The nationwide unclaimed financial assets awareness campaign 'Aapki Poonji, Aapka Adhikar' was launched from Mumbai, Maharashtra.
- A. 4 only
- B. 1 and 2
- C. 3 only
- D. 2 and 4