India’s banking sector plays a crucial role in the country’s economic growth, and government banks are at the heart of it. These public sector banks are trusted by millions for their stability, wide network, and customer-friendly services. But with so many options, how do you know which is best? Which bank offers the most savings, loans, and digital banking benefits?
In this blog, we’ll list the top government banks in India, their strengths, recent mergers, and how they compare. Whether opening your first account or looking for better banking services, this guide will help you make the right choice.
Public sector banks form the backbone of India’s banking system. The government owns and regulates these banks, ensuring stability, security, and accessibility for millions of customers. As of 2025, there are 12 nationalised banks operating in the country. Here’s the complete list:
Market capitalisation is an important factor when choosing a bank, as it reflects the bank’s financial strength and stability. The top 10 public sector banks in India, ranked by market cap are listed below along with their branch network.
| Bank Name | Number of Branches | Market Capitalization (₹ Crore) |
|---|---|---|
| 1. State Bank of India (SBI) | 22,740 | ₹6,67,695 Cr |
| 2. Punjab National Bank (PNB) | 10,168 | ₹1,14,608 Cr |
| 3. Bank of Baroda | 8,356 | ₹1,13,620 Cr |
| 4. Union Bank of India | 8,572 | ₹91,122 Cr |
| 5. Canara Bank | 9,816 | ₹86,044 Cr |
| 6. Indian Bank | 5,877 | ₹73,800 Cr |
| 7. UCO Bank | 3,263 | ₹50,753 Cr |
| 8. Bank of India | 5,202 | ₹49,000 Cr |
| 9. Central Bank of India | 4,541 | ₹44,351 Cr |
| 10. Bank of Maharashtra | 2,551 | ₹39,242 Cr |
Also read: List of Top Private Banks in India
Whether you need a savings account, business loan, or digital banking solutions, these banks cater to different needs. Below is a detailed overview of the largest government banks in India, highlighting their strengths and market presence.
SBI is India’s biggest public sector bank, with over 45 crore customers, and it has a large branch and ATM network. It’s a leader in retail, corporate and digital banking. SBI also implements government financial schemes like Jan Dhan Yojana and Mudra Loans.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 10.03 | 39.33 | 131.79 |
PNB is one of India’s oldest and most trusted government banks offering a wide range of banking services with focus on business financing. The bank offers the best interest rates on business loans, MSME funding and agricultural loans, making it a preferred choice for small businesses and farmers.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -19.84 | 138.18 | 68.91 |
Bank of Baroda is one of India’s largest public sector banks, with a presence in over 20 countries. They have special services for NRIs, forex transactions and global business banking. They are also innovators in digital banking and provide a seamless experience through mobile and internet banking.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -11.59 | 91.5 | 134.98 |
Union Bank of India is one of the government banks in India and is actively involved in financial inclusion initiatives. They provide easy access to government schemes like Pradhan Mantri Awas Yojana (PMAY), Jan Dhan Yojana and various agricultural finance options.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -18.68 | 150.53 | 143.62 |
Canara Bank is one of the best bank in India in digital banking among public sector banks, with a user-friendly mobile banking app, UPI services and advanced Internet banking. The bank has introduced AI-powered chatbots to help customers and resolve queries faster.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -14.74 | 82.39 | 147.76 |
Indian Bank has a strong presence in semi urban and rural areas, offering savings accounts, agri loans and microfinance solutions. It has actively promoted government-backed financial literacy programs and small business financing.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 0.17 | 242.09 | 463.18 |
UCO Bank is good for MSME loans, startup funding and business loans. The bank is also into forex services so good for international business. Its growing digital presence has attracted tech savvy users looking for online convenience.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -37.85 | 217.24 | 177.84 |
Bank of India has a good reputation for corporate banking, offering various financial solutions for big businesses and industries. It offers trade financing, project loan and investment banking services, so a preferred partner for corporate clients.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -22.5 | 84.33 | 64.4 |
Central Bank of India is a pioneer in financial inclusion, offering affordable banking services to lower-income groups. It has introduced various zero-balance savings accounts, low-interest loans, and priority sector lending schemes. The bank has a strong rural presence, ensuring that even the most remote areas have access to formal banking services.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -31.27 | 137.02 | 182.33 |
Bank of Maharashtra has a strong foothold in India's western and central parts. It offers regional banking solutions tailored for local businesses, self-employed individuals, and rural communities. The bank is known for its personalized customer service and localized financial products.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -25.1 | 146.85 | 305.75 |
In 2020, the Indian government consolidated the banking sector by merging several public sector banks into bigger, more efficient ones. This was to improve customer service and capital strength and streamline banking operations. As a result, 6 public sector banks were merged into bigger nationalised banks, and the total number of government banks in India was reduced.
Below is a list of public sector banks that were merged after 2020:
| Merged Banks | Merged Into |
|---|---|
| Oriental Bank of Commerce & United Bank | Punjab National Bank (PNB) |
| Andhra Bank & Corporation Bank | Union Bank of India |
| Syndicate Bank | Canara Bank |
| Allahabad Bank | Indian Bank |
Also read: List of Top Private Banks in India
Choosing the right government bank depends on your financial needs, banking habits and the services you require. While all public sector banks in India offer security and reliability, each bank has its own strengths. Below are the key factors to consider when selecting the right bank.
Government banks or public sector banks (PSBs) are banks in which government has more than 50% stake. These banks are regulated by the Reserve Bank of India (RBI) and play a big role in economic growth by providing affordable financial services to individuals, businesses and rural communities.
As of 2025, there are 12 public sector banks in India after several banks were consolidated after 2020. These banks account for more than 60% of the total banking assets in the country.
India’s banking sector is divided into different categories, each serving specific financial needs. Here’s a quick overview:
Choosing between government and private banks in India depends on stability, service quality, and digital banking features. Here’s a quick comparison:
| Factor | Government Banks | Private Banks |
|---|---|---|
| Ownership | Majority-owned by the government | Owned by private shareholders |
| Interest Rates | Competitive but sometimes lower | Slightly higher but flexible |
| Customer Service | Slower response times, long queues | Quick service, faster processing |
| Digital Banking | Improving but not as advanced | Strong digital platforms |
| Loan Approvals | Slower due to strict verification | Faster and more flexible |
| Trust & Stability | Highly secure and government-backed | Strong but depends on performance |
Government banks are best for those looking for long-term security and lower fees, while private banks excel in fast service and digital innovation.
State Bank of India (SBI) is the largest government bank in India in terms of market capitalisation and customer outreach. Founded in 1955, SBI has been the country's most trusted and financially sound bank. It serves 45 crore+ customers and has a massive network of 22,700+ branches and 65,000+ ATMs across India.
In recent times, SBI has also become a leader in digital banking, offering seamless online banking experiences through SBI YONO, mobile banking, and net banking. With a market capitalisation of ₹6,67,695 Cr, SBI is the first choice of millions of Indians for secure and convenient banking.
As of 2025, there are 12 PSU banks in India. After the 2020 bank mergers aimed at strengthening the banking sector and improving operational efficiency, the number of PSU banks was reduced from 27 to fewer but stronger institutions with better financial stability, more branch networks and better customer services.
Government banks not only provide banking services but also offer investment opportunities through their stocks. Below is a list of India's top 5 government banks based on their stock performance over the last five years.
| Bank Name | Current Market Price (CMP) ₹ | 5-Year Return (%) |
|---|---|---|
| Indian Bank | ₹543.95 | 463.18 |
| Bank of Maharashtra | ₹50.10 | 305.75 |
| Central Bank of India | ₹50.95 | 182.33 |
| UCO Bank | ₹42.54 | 177.84 |
| Canara Bank | ₹94.15 | 147.76 |
Also read: Best Banks in India 2025
Government banks remain the backbone of India’s financial system, offering millions of customers stability, affordability, and trust. With 12 public sector banks currently operating, they continue to dominate in terms of customer reach, government-backed security, and essential financial services. Choosing the top government bank in India depends on your needs: higher savings interest, better loan options, or superior customer service.
The best government bank in India depends on your financial needs. However, based on overall performance, the top choices include State Bank of India (SBI), BOB, Canara Bank, Union Bank of India, and Punjab National Bank (PNB). SBI is the largest public sector bank, while Bank of Baroda and Canara Bank have shown strong digital banking growth.
As of 2025, there are 12 public sector banks in India. This number decreased after the bank mergers in 2020, which aimed to strengthen the banking sector by creating larger and more efficient institutions.
Central government banks refer to public sector banks (PSBs) where the Indian government holds a majority stake. These banks are regulated by the Reserve Bank of India (RBI) and ensure financial stability for the public. Examples include SBI, PNB, Bank of Baroda, Canara Bank, and Union Bank of India.
Semi-government banks are institutions where the government holds a partial stake, but they are not classified as fully public sector banks. Some cooperative banks and regional rural banks (RRBs) fall under this category, as they receive government support but also function with private involvement.
The State Bank of India (SBI) is the largest government bank in India. SBI has the highest market capitalization, a vast customer base of over 45 crore, and an extensive network of 22,700+ branches and 65,000+ ATMs.
Government banks offer several advantages over private banks, making them a preferred choice for many customers. Public sector banks provide higher stability, as they are backed by the government, ensuring customer deposits remain safe. They also charge lower fees on banking transactions and offer affordable interest rates on loans.
Disclaimer: This article is intended for educational purposes only. Please note that the data related to the mentioned companies may change over time. The securities referenced are provided as examples and should not be considered as recommendations.
