MUMBAI, Aug. 28 -- Punjab National Bank's quarterly profit in India does not usually clear Rs.5,000 crore. In Q1 FY27, it surged to Rs.5,253 crore - a 214% jump from Rs.1,674 crore a year earlier - driven almost entirely by the collapse in provisions as the bank's most stubborn legacy bad loans moved toward resolution.

That number is the sharpest data point in a quarter that tells a broader story about India's public-sector banks: the NPA crisis that consumed the sector through 2015-2020 has now, for most of the major lenders, materially resolved. State Bank of India's gross NPA ratio reached 1.47% in Q1 FY27, the lowest in more than two decades. Canara Bank's gross NPA fell to 1.57%. Even Bank of Baroda, whose headline profit collapsed ...