Government Banks in India: Complete List of All 12 Banks

TL;DR: India will have 12 banks in 2026 in India which come under public sector banks (government banks). Largest bank: SBI (market capitalisation of ₹9.49 lakh crore). All banks are regulated by RBI, majority shareholding by the government. Benefits: lower interest rates, extensive rural presence, access to government schemes. Largest government banks: SBI, Bank of Baroda, PNB. Each bank has its own strength. Select your preferred bank as per your requirements or use CreditMitra to compare personal loan offers of all banks.

What Are Government Banks in India?

Government banks in India, also known as public sector banks or nationalised banks are those banks wherein the government holds at least 51% shares. These banks are regulated by the Reserve Bank of India (RBI) and work towards social welfare and financial inclusion, unlike commercial banks which focus only on profit.

Some characteristics of government banks are as follows:

• More than 51% ownership by government of India

• Regulated and overseen by RBI

• Lower interest rates than private banks

• More extensive rural presence

• Implementing government schemes

Currently, there are 12 government banks running in India, having consolidated from 27 government banks through mergers (2019-2021).

Complete List of 12 Government Banks in India (2026)

Top 3 Government Banks by Market Capitalisation (2026)

1. State Bank of India (SBI) - ₹9.49 Lakh Crore

• Customers: 53+ crore (largest customer base in India)

• Branches: 16,000+

• ATMs: 60,000+

• Strength: Largest network, innovative digital services (YONO app), extensive rural presence

• Best for: General banking, government schemes (Jan Dhan, MUDRA)

2. Bank of Baroda (BoB) - ₹1.59 Lakh Crore

• Established in 1908

• Strength: Modern digital banking, international presence

• International presence: 32 countries

• Best for: Digital banking, international transactions

3. Punjab National Bank (PNB) - ₹1.48 Lakh Crore

• Established in 1895 (oldest among government banks)

• Strength: Lending to agriculture sector, MSME loans

• Best for: Business owners, farmers, SMEs

Government vs Private Banks: Important Differences

Conclusion: Government banks focus more on accessibility and affordability. Private banks focus more on efficiency.

History: How Government Banks Emerged in India

1959: Nationalization of SBI Subsidiaries

In 1959, seven subsidiaries of State Bank of India were nationalized and formed the basis of government banks of today.

1969: The Great Nationalization

Announcement by Prime Minister of India Mrs. Indira Gandhi to nationalize 14 major private banks, marking a turning point in India's banking history.

1980: Second Round of Nationalizations

Another six private banks were nationalized in 1980.

2019-2021: Merger Period

Through mergers, the government consolidated 27 banks into 12.

Result: From private banking to government banking, India has today one of the best public sector banking systems with 300+ crore customers.

Services Offered by Government Banks

Savings and Current Accounts

All 12 government banks offer the following products:

• Zero balance savings accounts (Jan Dhan Yojana)

• Salary accounts

• Regular savings accounts

• Current accounts (business accounts)

Loans

• Personal Loans: 8-12% interest (lower than private banks)

• Home Loans: Affordable housing loans

• Car Loans: Loans for cars

• Business Loans: MUDRA loans for startups

• Agricultural Loans: Crop loans, farm equipment loans

Deposits and Investments

• Fixed Deposits (FDs)

• Recurring Deposits

• Savings Accounts

• Investment services

Government Schemes

• Jan Dhan Yojana: Free basic bank accounts

• Pradhan Mantri MUDRA Yojana: Loans for businesses up to ₹10 lakh

• PM-Kisan Scheme: Direct payment to farmers

• Atal Pension Yojana: Retirement saving scheme

Digital Banking

• YONO (State Bank of India's super app): All banking services through mobile phones

• UPI: Immediate transfer of money

• Mobile banking: Offered by all 12 banks

• Online bill payment

Which Government Bank Should You Choose?

Choose SBI If:

• You need India's largest network (70,000+ branches)

• You want government scheme access

• You prefer the strongest digital platform (YONO)

• You seek most customer support

Choose Bank of Baroda If:

• You prefer digital banking

• You need international services

• You need modern app

Choose PNB If:

• You're a farmer (PNB gives loans to agriculture sector)

• You're a business owner (offers MSME loans)

• You prefer competitive rates

Choose Union Bank If:

• You emphasize on financial inclusion

• You need regional presence with national network

Choose Bank of Maharashtra If:

• You're from Maharashtra region

• You want personalized regional services

Or Use CreditMitra

Compare loan offers from all 12 government banks and other private banks in one place. CreditMitra matches you with lowest loan rate on your credit profile.

Advantages of Government Banks

High Safety and Security

High safety and security due to government backing and RBI regulation. Deposits are insured by DICGC up to ₹10 lakhs, which is the highest guarantee provided in India.

Low Interest Rates

Lower interest rates on loans compared to private banks. If you are borrowing a ₹20 lakh personal loan, you save ₹40,000-₹80,000 over the tenure.

Low Service Charges

Low account maintenance and transaction charges compared to private banks.

High Rural Presence

Widespread presence in rural India, unlike private banks whose presence is restricted to cities.

Government Schemes

Full access to Jan Dhan, MUDRA, PM-Kisan, and other government schemes.

Financial Inclusion

Objective to provide banking to every Indian, so that no Indian is deprived of bank services.

Disadvantages of Government Banks

Slow Service

Slower service due to 53+ crore customers.

Complexity in Documentation

Comprehensive documentation required for loan approval.

Slow Loan Approval

Personal loans approved in 7-15 days, compared to 2-5 days at private banks.

Less Digital Services

Digital services are still evolving in government banks, compared to private banks (YONO app changes this trend).

Crowded Branches

Popular branches can get busy during peak hours.

Are Government Banks Safe in India?

Yes, absolutely! The reasons are:

• Government Backing: Direct support of government

• RBI Regulation: Strict regulation and oversight

• DICGC Insurance: Deposits insured up to ₹10 lakhs

• Systemically Important: Too-big-to-fail

• Audits: Frequent audits by RBI

• Stability: Centuries of trust

With 300+ crore customers and 70,000+ branches, government banks make India's financial backbone.

Frequently Asked Questions

Q: How many government banks are there?

A: 12 government banks are functioning currently in India, having consolidated from 27 through recent mergers.

Q: Which is the largest government bank?

A: State Bank of India (SBI), largest with market capitalisation of ₹9.49 lakh crore and 53+ crore customers.

Q: Are government banks safe?

A: Yes. They are backed by government, regulated by RBI, and their deposits are insured up to ₹10 lakhs.

Q: Why do government banks offer lower interest?

A: Their primary objective is not profit maximisation but social welfare and financial inclusion.

Q: Can I have accounts in multiple government banks?

A: Yes, each deposit is individually insured up to ₹10 lakhs by DICGC.

Q: When were the banks nationalized in India?

A: Three phases: 1959 (7 SBI subsidiaries), 1969 (14 banks), 1980 (6 banks).

Conclusion: Choose Your Government Bank

Government banks still remain backbone of Indian financial system. All 12 government banks have their own strengths:

• SBI for largest network

• Bank of Baroda for digital banking

• PNB for agricultural/business loans

• Other banks for regional presence and specific services

The best government bank depends upon your requirement:

• Savings Account? Open account in the nearest bank

• Personal Loan? Compare rates in different banks

• Startups? MUDRA loans from any bank

• Farmers? Loans from agriculture sector

Uncertain which government bank will give you the best loan rates? Use CreditMitra to compare loan offers from all banks. CreditMitra matches you with the lowest personal loan rates based on your credit profile in 2 minutes.