Indian banks saw increased market capitalization in Q2 2025 driven by lower interest rates and improved liquidity. However, slowing credit growth and global uncertainties pose challenges. Key banks like HDFC Bank, ICICI Bank, and State Bank of India saw significant market cap gains, while AU Small Finance Bank had the largest increase. The Nifty 50 and Nifty Bank indices rose sharply, though credit growth slowed, and the Reserve Bank of India implemented measures to boost liquidity.

The Indian government plans to accelerate the disinvestment process in public sector banks, aiming to sell up to 20% stake in five PSU banks (UCO Bank, Bank of Maharashtra, Indian Overseas Bank, Central Bank of India, and Punjab & Sind Bank) via QIP and OFS routes over six months. The move seeks to meet SEBI's 25% public shareholding norm by August 2026, with proceeds funding capital and operational needs. PSU bank stocks rallied up to 4% following the announcement.

Several major Indian banks, including Punjab National Bank (PNB), Bank of India, and UCO Bank, reduced their lending rates following the Reserve Bank of India's (RBI) 50-basis-point repo rate cut. The rate adjustments aim to make borrowing more affordable for consumers and businesses, effective from June 10, 2025.

The article highlights India's top-15 banks earning significant commissions from financial products, regulatory actions by the RBI, and multiple banking scandals. It covers penalties imposed on banks for non-compliance, cuts in interest rates, and issues like fraud, mis-selling, and cybersecurity concerns in the Indian banking sector.

State-run UCO Bank has appointed Sumit Khandelwal as its new chief financial officer (CFO) with immediate effect, replacing Sujoy Dutta. Khandelwal, a 48-year-old banker with a background in commerce, law, and accounting, brings over 15 years of banking experience, including roles as general manager and zonal head in the New Delhi zone.