New Delhi: Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, chaired a crucial review meeting today to assess the performance of Public Sector Banks (PSBs) on key financial parameters, deposit mobilization, digital payments, and cyber security frameworks. The meeting, held in New Delhi, was attended by senior officials including Dr. Vivek Joshi, Secretary of the Department of Financial Services (DFS), M. Nagaraju, Secretary-Designate of DFS, as well as the heads of various PSBs.
During the meeting, it was highlighted that PSBs have shown robust performance in the financial year 2023-24, demonstrating significant improvements across various financial metrics. Notably, the Net Non-Performing Assets (NNPAs) declined to 0.76%, capital adequacy stood at a strong 15.55%, and the Net Interest Margin (NIM) was recorded at 3.22%. Additionally, PSBs achieved their highest-ever net aggregate profit of ₹1.45 lakh crore, returning a dividend of ₹27,830 crore to shareholders. These positive outcomes have also enhanced the ability of PSBs to raise capital from the markets.
However, Sitharaman pointed out that while credit growth has been strong, there is a need for greater efforts in deposit mobilization to ensure sustainable funding for this growth. She urged banks to conduct special drives to attract deposits and emphasized the importance of cultivating strong customer relationships to enhance service delivery, particularly in rural and semi-urban areas. The Finance Minister also encouraged PSBs to collaborate and share best practices in emerging areas, equipping themselves to keep pace with the rapid changes in the banking sector.
Acknowledging the strides made by PSBs in improving asset quality, Smt. Sitharaman advised banks to maximize the potential of resolution and recovery mechanisms offered by institutions like the National Company Law Tribunal (NCLT) and the National Asset Reconstruction Company Limited (NARCL).
The meeting also focused on digital payments and cyber security, areas of growing importance in the banking industry. The Finance Minister stressed that cyber security should be approached from a systemic perspective, advocating for a collaborative effort between banks, the government, regulators, and security agencies to mitigate cyber risks. She called for periodic and thorough reviews of all aspects of the IT systems from a cyber security standpoint to prevent breaches and ensure the safety of banking operations.
Sitharaman also reiterated the government’s commitment to facilitating credit access for citizens at the grassroots level through various schemes. She instructed banks to expedite the implementation of recent budget announcements, including the introduction of a new credit assessment model for MSMEs based on digital footprints and cash flows. Additionally, the Finance Minister urged PSBs to focus on increasing credit flow to eligible beneficiaries under government initiatives such as the PM Surya Ghar Muft Bijli Yojana and the PM Vishwakarma Yojana.
In conclusion, Sitharaman emphasized the importance of compliance with the Reserve Bank of India’s guidelines on the timely handover of security documents after loan closures. She directed that there should be no delays in providing these documents to customers, ensuring a seamless and customer-friendly banking experience.
This meeting underscores the government’s commitment to ensuring that PSBs continue to play a pivotal role in India’s financial ecosystem, driving growth, and fostering financial inclusion while safeguarding the interests of customers through enhanced security measures.