The finance ministry has called a meeting of heads of public sector banks (PSBs) on May 29 to review credit flow to the agriculture and MSME sectors, financial performance and banking operations amid the ongoing Middle East crisis, PTI reported.The meeting will be chaired by Financial Services Secretary M Nagaraju, a day before his retirement.According to sources, discussions during the review meeting will also cover the functioning and financial performance of regional rural banks (RRBs), progress on the Jan Samarth portal, AI-related issues and digital frauds.There will also be deliberations on recovery mechanisms and progress under debt recovery tribunals (DRTs) and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.The meeting comes after state-owned banks posted a record combined net profit of Rs 1.98 lakh crore in FY26, marking the fourth consecutive year of profitability for PSBs.Improved asset quality, credit growth and higher income helped drive earnings during the year.Aggregate operating profit of PSBs stood at Rs 3.21 lakh crore, while net profit rose 11.1 per cent year-on-year to Rs 1.98 lakh crore.The total business of PSBs increased 12.8 per cent to Rs 283.3 lakh crore as of March 31, 2026.Aggregate deposits rose 10.6 per cent to Rs 156.3 lakh crore, while gross advances grew 15.7 per cent to Rs 127 lakh crore, reflecting sustained credit demand across sectors.Asset quality also improved, with gross non-performing assets (NPA) ratio declining to 1.93 per cent and net NPA ratio falling to 0.39 per cent at the end of FY26.Fresh slippages declined further during the year, with the slippage ratio reducing to 0.7 per cent. Total recoveries, including written-off accounts, stood at Rs 86,971 crore.