The banking sector forms the backbone of the Indian financial system, intermediating savings into productive credit and transmitting monetary policy to the real economy. Within this system, public sector banks (PSBs) and private sector banks (PVBs) coexist as two structurally distinct ownership groups whose profitability trajectories have diverged sharply over the last decade. This paper undertakes a comparative analysis of the profitability of public and private sector banks in India, using key profitability and efficiency indicators - Return on Assets (ROA), Return on Equity (ROE), Net Interest Margin (NIM), Net Profit Margin and asset-quality proxies such as the Gross NPA (GNPA) and Net NPA (NNPA) ratios. The study draws on secondary data compiled from the Reserve Bank of India (RBI), the Press Information Bureau, published bank financial statements and prior empirical research covering the period from FY 2017–18 to FY 2024–25. The analysis finds that although the overall banking system has staged a strong turnaround — with system-wide GNPA falling to a multi-decade low of about 2.3% and system ROA and ROE recovering to roughly 1.37% and 14.1% respectively by FY 2024–25 — private sector banks have consistently outperformed public sector banks on most profitability and efficiency metrics. Private banks sustain higher net interest margins, lower non-performing asset ratios and stronger return ratios, driven by superior cost efficiency, a higher-yielding retail loan mix, better credit underwriting and greater income diversification. Public sector banks, however, have narrowed the gap appreciably since FY 2020–21 following recapitalization, consolidation and the clean-up triggered by the Asset Quality Review. The paper concludes with recommendations for strengthening PSB profitability through governance reform, digital investment, risk-based pricing and continued balance-sheet discipline.

Shreyash Pradip Lonare, Dr. Ujwala Narkhede, "Comparative Analysis of Profitability of Public and Private Sector Banks in India" International Journal of Scientific Research and Engineering Development, V9(5): Page(816-822) September - October 2026. ISSN: 2581-7175. www.ijsred.com. Published by Scientific and Academic Research Publishing.