Union Finance Minister Nirmala Sitharaman and chiefs of public sector banks (PSBs) held a meeting to discuss mobilizing deposits through special drives and strengthening customer bonds.
The gathering came amid concerns that deposits are increasing slower than credit. Sitharaman recommended banks to maximize the breadth of resolution and recovery services provided by the National Company Law Tribunal (NCLT) and the National Asset Reconstruction Company Ltd (NARCL), with the focus on increasing deposits.
The FM also met with top executives of regional rural banks, who were asked to expedite one state-one RRB initiative. The focus was on strengthening banks’ IT systems from a cybersecurity perspective, ensuring that banks’ systems are not breached or compromised.
Sitharaman urged banks to ensure their employees actively connect with customers, particularly in rural and semi-urban areas. She also encouraged PSBs to explore collaborations to leverage each other’s strengths by sharing best practices in emerging areas and equipping themselves to keep pace with changes in the banking sector.
Sitharaman instructed banks to expeditiously implement recent Budget announcements, including a new credit assessment model for Micro Small and Medium Enterprises (MSMEs) based on digital footprints and cash flows. Banks were told to focus on increasing credit flow to eligible beneficiaries under various government initiatives like the PM Surya Ghar Muft Bijli Yojana and PM Vishwakarma Yojana.
During FY24, PSBs improved their asset quality, with net non-performing assets declining to 0.76 per cent. They have a capital adequacy ratio of 15.55 per cent, a net interest margin of 3.22 per cent, and the highest net aggregate profit so far of Rs 1.4 trillion, with a dividend of Rs 27,830 crore to shareholders.
At the meeting with regional rural banks, the FM instructed all 43 RRBs to focus on improving business performance, upgrading digital technology services, and fostering growth in MSME clusters.
Get the latest news updates and stay informed with FELA NEWS!
Source: Business Standard
