Do I need to score more than 65% in the last year of engineering or my aggregate of all 4 years should be 65% if PSUs have 60-65% criteria?

You should have scored a minimum of 65% marks as aggregate, and you are done.

When you are applying for higher studies in post-graduation or any other, the marks of all years are taken as average (add all year's % and divide by number of years) to get your average marks.