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Canara Bank Tops Public Sector Banks in Lending to State PSUs and Corporations for Fifth Consecutive Year

In a remarkable achievement, Canara Bank has once again emerged as the leading public sector bank in lending to state-owned corporations and Public Sector Undertakings (PSUs) for the fifth consecutive year. The Finance Ministry, in response to queries raised by MP Velusamy P, disclosed that Canara Bank’s lending to government-backed entities reached an impressive ₹187,813 crore during the fiscal year 2022-23 (FY23). This amount represented an 11% increase compared to the previous fiscal, wherein the bank disbursed ₹1,69,532 crore to government entities.

Canara Bank’s Dominance in Lending:

Canara Bank’s commitment to supporting state-run public sector enterprises and corporations remains unparalleled, accounting for over 45% of the total lending by all public sector banks. This demonstrates the bank’s robust financial strength and dedication to fulfilling the financial needs of government-backed entities.

Here’s a table representing the top lenders to State PSUs and corporations during the fiscal year 2022-23:

Rank Bank Total Loan Disbursed (in ₹ crore)
1 Canara Bank 187,813
2 Punjab National Bank 70,143
3 State Bank of India 66,523
4 Bank of India 25,147
5 Bank of Baroda 15,707
6 Union Bank of India 12,585
7 Bank of Maharashtra 10,823
8 Indian Bank 9,021
9 Indian Overseas Bank 7,490
10 Central Bank of India 3,949
11 UCO Bank 2,939
12 Punjab and Sind Bank 88.7

Punjab National Bank’s Performance:

Punjab National Bank secured the second position in terms of lending to State and Union Territory-owned entities, with a total loan disbursal of ₹70,143 crore in the previous fiscal year. However, the bank experienced a decline in lending compared to FY22 when it disbursed ₹96,396 crore.

State Bank of India’s Lending Activity:

Despite being the largest public sector bank in the country, State Bank of India’s lending to state enterprises decreased from ₹81,735 crore in FY22 to ₹66,523 crore in FY23. The decline may be attributed to various factors affecting the bank’s lending policies during the said period.

Bank of Baroda’s Reduction in Lending:

Bank of Baroda also witnessed a significant reduction in lending to corporations and State PSUs during FY23. The total loan disbursed in the previous fiscal amounted to ₹15,707 crore, down from ₹42,015 crore in FY22.

Lowest Exposure:

On the other end of the spectrum, Punjab & Sind Bank had the lowest exposure to State PSUs and corporations during FY23, with a lending of ₹88 crore, indicating a significant decrease from the previous year’s lending of ₹3,570 crore.

Overall Lending Trends:

The combined lending by 12 public sector banks to government entities declined to ₹4.12-lakh crore in FY23 from ₹4.93-lakh crore in FY22. This reduction may reflect various economic and market conditions during the period.

State Governments’ Loans:

In an interesting observation, the Union Finance Ministry disclosed that nationalized banks did not disburse loans to State governments in the last five years. This information highlights a specific trend in the lending practices of public sector banks concerning state governments.

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