When it comes to helping Micro, Small, and Medium Enterprises (MSMEs) in India's Vidarbha region thrive, public sector banks (PSBs) are indispensable. This study analyses the economic effects of PSBs' financial policies on micro, small, and medium-sized enterprises (MSMEs) in the Indian state of Vidarbha. The study delves into the ways in which PSBs help micro, small, and medium-sized enterprises (MSMEs) overcome financial limitations by reviewing and analysing the existing literature on the topic. The main results show that small and medium-sized enterprises (SMEs) heavily depend on bank loans (PSBs), especially for working capital and to help grow their businesses. This paper takes a look at the programmes and policies put in place by the government to help PSBs and MSMEs work together better, and it finds both the good and the bad. Findings highlight PSBs' pivotal role in boosting Vidarbha's economy and encouraging entrepreneurial spirit. The report finishes with suggestions for how the area can optimise PSB policies, increase financial inclusion, and fortify MSME resilience, all of which would help with long-term economic growth.