FM Sitharaman Requests that PSBs make "Concerted Efforts" to Advance the Deposit Drive

Public sector banks (PSBs) were subject to a performance review by Finance Minister Nirmala Sitharaman on Monday. The review focused on critical financial metrics, including adopting new credit products and schemes, cybersecurity, digital payments, and deposit mobilisation.

Sitharaman stressed during the review that PSBs should launch special campaigns to increase deposit collections and improve customer service, especially in rural and semi-urban areas. She also stressed the significance of banks having more effective customer connections and delivering services efficiently. RBI Governor Shaktikanta Das also brought attention to the banking industry's deposit problems.

The finance minister emphasised the significance of a cooperative strategy involving banks, the government, regulators, and security agencies to combat fraudulent activities and reduce the risks associated with cybersecurity. A new credit assessment model for MSMEs that uses digital footprints and cash flows was among the recent budget announcements that Sitharaman urged banks to implement swiftly. Additionally, she directed banks to expand credit availability to those who qualify for programs like the PM Vishwakarma and PM Surya Ghar Muft Bijli Yojanas.

However, during the review meeting, it was noted that PSBs had a successful FY24, marked by a record net profit of Rs 1.45 lakh crore, strong capital adequacy, enhanced asset quality, and a 3.22% net interest margin.