Nirmala Sitharaman reviews performance of Public Sector Banks

Finance Minister Nirmala Sitharman on Monday held a performance review meeting in New Delhi with heads of public sector banks and urged them to improve their deposit growth.Deposits have been growing 300-400 basis points lower than the credit growth in the last few months, creating an asset-liability mismatch for banks. According to sources, the finance minister reviewed the financial performance of banks and progress made in the implementation of various flagship schemes of the government, including PM Awas Yojana, PM Surya Ghar and PM Vishwakarma Yojana.
She  advises PSBs to carry out special drives to garner deposits; to focus on efficient customer service delivery and have connect with customers, esp. in Rural and Semi-urban areas and emphasised on a collaborative approach between banks, Government, regulators and security agencies against frauds and cyber security risks.Banks must expeditiously implement recent Budget announcements, including, a new credit assessment model for MSMEs based on digital footprints and cash-flows, says FM Sitharaman.Issues related to fraud and wilful defaulters and progress on the National Asset Reconstruction Company Ltd (NARCL) also came up for discussion, they added. This was the first review meeting after the presentation of Budget 2024-25.
On the performance front, PSU banks’ net profit has crossed Rs 1.4 lakh crore in the financial year ended March 2024, recording a growth of 35 per cent over the previous year on a high base of Rs 1 lakh crore. The 12 Public Sector Banks (PSBs) together had earned a net profit of Rs Rs 1,04,649 crore in 2022-23.Out of the total profit of Rs 141,203 crore earned during the FY24, market leader State Bank of India (SBI) alone contributed over 40 per cent of the total earnings, as per the published numbers on exchanges.