Union Finance Minister Nirmala Sitharaman chairs a meeting to review the performance of Public Sector Banks (PSBs), in New Delhi on Monday. Department of Financial Services (DFS) Secretary M Nagaraju, DFS Additional Secretary MP Tangirala and other dignitaries are also present.
| Photo Credit: ANI
Finance and Corporate Affairs Minister Nirmala Sitharaman on Monday acknowledged public sector banks’ efforts to improve asset quality, with net non-performing assets dipping to 0.76% in in 2023-24, but advised them to optimise resolution and recovery proceedings, and make ‘concerted efforts’ to spruce up deposits that are lagging credit growth.
The government and the central bank have been nudging banks to mobilise deposits that have been growing at a 3% to 4% slower pace than credit in recent months. On August 10, the issue was also discussed at the Reserve Bank of India’s central board meeting and Ms. Sitharaman had advocated a return to the ‘old-fashioned approach’ of raising small sums from many savers, instead of chasing bulk corporate deposits that she called a sign of ‘very lazy’ banking.
During the performance review of public sector banks, the Minister reiterated that mobilisation of deposits could further be improved to “fund the credit growth sustainably” and asked banks to make concerted efforts to garner deposits by conducting special drives. She also urged banks to reach out to their customers, especially in rural and semi-urban areas.
Banks were also asked to expeditiously implement the Union Budget announcements that include a new credit assessment model for micro, small and medium enterprises (MSMES) based on digital footprints and cash-flows. Separately, they were also told to brook no delays in handing over security documents to customers after a loan account is paid off.
