FM Nirmala Sitharaman reviews public sector banks’ performance
Finance Minister for Finance and Corporate Affairs, Nirmala Sitharaman, chaired a comprehensive meeting in New Delhi to review the performance of Public Sector Banks (PSBs). The discussion covered various financial metrics including deposit mobilization, digital payments, cyber security, and access to credit under financial inclusion initiatives.
Attendees included Vivek Joshi, Secretary; M. Nagaraju, Secretary-Designate of the Department of Financial Services (DFS); along with the heads of PSBs and senior DFS officials. Key financial highlights for FY24 were shared during the meeting, demonstrating the strong performance of PSBs.
Notably, Net NPAs (NNPAs) decreased to 0.76%, capital adequacy was solid at 15.55%, and Net Interest Margin (NIM) stood at 3.22%. The PSBs also recorded their highest-ever net aggregate profit of ₹1.45 lakh crore, distributing dividends totaling ₹27,830 crore to shareholders. This robust performance has strengthened the banks’ ability to raise capital from the markets.
Despite positive credit growth, Sitharaman emphasized the need to further improve deposit mobilization to sustainably fund this growth. She urged banks to conduct special drives to attract deposits and foster stronger relationships with customers, especially in rural and semi-urban areas.
The Finance Minister also encouraged PSBs to collaborate, share best practices, and adapt to emerging changes in the banking sector.
Addressing the ongoing efforts to improve asset quality, Sitharaman advised banks to maximize the benefits offered by resolution and recovery frameworks like NCLT and NARCL.
Cybersecurity was another focal point of the meeting. The Finance Minister stressed the importance of a systemic approach to cybersecurity, calling for collaboration between banks, the government, regulators, and security agencies to mitigate cyber risks. She also recommended regular and thorough reviews of IT systems to prevent security breaches.
Sitharaman highlighted the government’s ongoing commitment to facilitating credit access for citizens, particularly those at the bottom of the economic pyramid. She urged banks to promptly implement recent Budget announcements, including a new credit assessment model for MSMEs based on digital footprints and cash flows.
Additionally, the Finance Minister directed banks to focus on increasing credit flow to eligible beneficiaries under schemes like PM Surya Ghar Muft Bijli Yojana and PM Vishwakarma Yojana. Finally, the Finance Minister instructed banks to ensure compliance with the Reserve Bank of India’s guidelines on the timely handover of security documents after loan closures, emphasizing that there should be no delays in this process.
