New Delhi, Aug 19 (UNI) Union Finance Minister Nirmala Sitharaman on Monday asked public sector banks (PSBs) to carry out special drives to garner deposits and expeditiously implement the announcements made in the Union Budget 2024-25.
In a meeting with heads of public sector banks here today, Sitharaman directed banks to focus on further increasing credit flow to eligible beneficiaries under initiatives like PM Surya Ghar Muft Bijli Yojana and PM Vishwakarma Yojana.
The Minister reviewed the performance of PSBs on their financial parameters, deposit mobilisation, digital payments and cyber security framework, in addition to access to credit under financial inclusion and other emerging issues.
Sitharaman emphasised on a collaborative approach between banks, government, regulators and security agencies against frauds and cyber security risks.
“Various financial parameters such as deposit mobilisation, digital payments and cyber security, implementation of new credit products/ schemes and access to credit under financial inclusion were discussed in detail during the review meeting,” an official release from the Finance Ministry said.
During the review meeting it was noted that during financial year 2023-24, the PSBs performed well across all financial parameters as evidenced by improved asset quality with Net Non-performing assets (NNPAs) declining to 0.76%, sound capital adequacy of the banks at 15.55%, Net Interest Margin (NIM) of the banks at 3.22%, and highest ever net aggregate profit of Rs 1.45 lakh crore with the dividend of Rs 27,830 crore to the shareholders.
“Improvements over various parameters have also enhanced the ability of PSBs to raise capital from the markets,” the release post review meeting said.
During deliberations on the deposit mobilisation, the Union Finance Minister stated that while the credit growth has picked up, 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.
Sitharaman also advised PSBs to have better relationships with their customers for efficient customer service delivery.
While acknowledging the efforts made by the banks to improve the asset quality, she advised them to optimise the scope of resolution and recovery offered by National Company Law Tribunal (NCLT) and National Asset Reconstruction Company Ltd (NARCL).
Sitharaman asked banks to expeditiously implement the recent Budget announcements, including a new credit assessment model for MSMEs based on digital footprints and cash-flows.
Further, the Minister also advised the banks to ensure compliance with the Reserve Bank of India’s guidelines on the handover of security documents after closure of the loans and directed that there should not be any delay in handing over the documents to the customer.
The performance review meeting was attended by Dr. Vivek Joshi, Secretary; M. Nagaraju, Secretary-Designate, Department of Financial Services (DFS) and heads of public sector banks besides senior officials of the DFS.
