Latest news with #Sitharaman
Time of India
7 hours ago
- Business
- Time of India
Government asks PSBs to step up lending after RBI's rate cut
NEW DELHI: Govt on Friday nudged banks to step up lending in view of healthy balance sheets and the reduction in interest rates by RBI. While reviewing the performance of state-run banks, finance minister Nirmala Sitharaman asked banks to prioritise deposit mobilisation to support credit growth and pushed them to undertake special drives and leverage their massive branch network to raise resources. During bank-wise presentations, the financial services secretary asked the lenders to make use of the clean books to lend, especially to small businesses. The finance minister flagged the energy sector, especially renewables, as a focus and asked banks to develop a credit model to support small modular nuclear reactors. "Deepening corporate lending in productive sectors was also emphasised, with a strong focus on maintaining robust underwriting and risk management standards," an official statement said. The finance minister also suggested that banks should "proactively identify" emerging commercial growth areas for the next decade, which can aid profitability and growth. The other important message was on improving customer experience, including in branches and simple online and offline platforms. Sitharaman focused on expanding the branch presence, especially expansion in metro and urban centres. The comments come at a time when private lenders have stepped up efforts in urban centres, which are seen to be more profitable. This will mean public sector players will have to double down on effort on this front, while balancing rural and semi-urban focus. In fact, Sitharaman also asked banks to focus on manpower requirements - including existing and arising vacancies - as branches are often not adequately staffed following expansion initiatives. Several banks have already started initiatives on improving customer service and improving the overall branch experience. Banks have been instructed to scale up efforts on financial inclusion schemes and expand their presence in GIFT City. Starting Tuesday, govt is launching a three-month financial inclusion saturation drive. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Mint
16 hours ago
- Business
- Mint
Sitharaman asks banks to step up lending as interest rates fall
Finance minister Nirmala Sitharaman has asked public sector banks to step up lending after Reserve Bank of India cut key policy rates early this month and contribute to the growth of the economy. The RBI cut its key repo rate by a larger-than-expected 50 basis points, as muted inflation gave policymakers room to prioritise growth amid global economic uncertainty. The finance minister also urged banks to boost lending to micro, small and medium enterprises, improve deposit mobilisation, while also instructing financial institutions to scale up efforts under key financial inclusion schemes, including PM MUDRA Yojana, PM Vishwakarma, PM Surya Ghar Muft Bijli Yojana, PM Vidyalaxmi, and the Kisan Credit Card (KCC) scheme. Sitharaman chaired a high-level meeting in Delhi on Friday to review the performance of public sector banks (PSBs) on financial parameters, credit offtake, financial inclusion, customer service, grievance redressal, digital banking, and cybersecurity. The meeting was also attended by Union minister of state for finance Pankaj Chaudhary; Secretary, department of financial services (DFS), M. Nagaraju; MDs of PSBs; and senior officials of the DFS. During the meeting, the finance minister acknowledged the strong financial performance of PSBs in recent years, and particularly in FY25. From FY23 to FY25, the total business of PSBs rose from ₹ 203 trillion to ₹ 251 trillion, net NPAs declined from 1.24% to 0.52%, net profit rose from ₹ 1.04 trillion to ₹ 1.78 trillion, and dividend payouts grew from ₹ 20,964 crore to ₹ 34,990 crore, according to a government statement. The finance minister was also informed that the PSBs are adequately capitalised, with their risk buffer (capital to risk-weighted assets ratio) standing at 16.15% as of March. Sitharaman emphasised the need for sustained efforts to improve deposit mobilisation to support ongoing credit growth. PSBs were advised to undertake special drives, effectively use their branch networks, and deepen outreach in semi-urban and rural areas. She urged PSBs to proactively identify emerging commercial growth areas for the next decade, which can aid their profitability and growth. She stressed deepening corporate lending in productive sectors, with a strong focus on maintaining robust underwriting and risk management standards. More so in renewable and sustainable energy areas, as advancing India's green growth agenda was a national priority. Banks were also advised to develop credit models to support the development of indigenously designed small modular nuclear reactors. As announced in the Union Budget 2025-26, PSBs were encouraged to focus on agri credit in the 100 low-crop productivity districts to be identified under the PM Dhan Dhanya Yojana. Banks were instructed to tailor special credit products to enhance agricultural productivity and unlock local economic potential by identifying and supporting farm products that can be developed in these particular districts. Banks were also advised to expand their presence in GIFT City to support India's aspirations in international financial services, tap into emerging global opportunities, and increase participation in the India International Bullion Exchange. To enhance customer experience, Sitharaman directed banks to ensure faster grievance redressal, offer simplified digital platforms, and provide multilingual services both online and offline. That includes maintaining clean, customer-friendly physical branches and expanding in metro and urban centres to keep pace with urbanisation. The finance minister directed the PSBs to participate actively in the upcoming three-month financial inclusion saturation campaign, beginning 1 July, covering 270,000 gram panchayats and urban local bodies. This campaign would also focus on assisting the citizens on know-your-customer (KYC) compliance, re-KYC and unclaimed deposits. Banks were directed to ensure focused outreach, adequate manpower deployment, and effective publicity of this special campaign to further deepen financial inclusion under schemes such as PM Jan Dhan Yojana, PM Jeevan Jyoti Bima and PM Suraksha Bima Yojana. Sitharaman was apprised of the progress under the new credit assessment model for MSMEs, launched on 6 March, with 1.97 lakh MSME loans amounting to ₹ 60,000 crore already sanctioned. Banks were directed to strengthen the model's implementation to broaden access to capital and expedite credit flow to small and medium businesses. The review noted that under the Stand Up India scheme, 228,000 loans worth ₹ 51,192 crore have been sanctioned. Similarly, under the PM Vidya Lakshmi scheme, 6,682 applications have been sanctioned, amounting to ₹ 1,751 crore. Given the government's commitment to supporting entrepreneurship and higher education through targeted credit initiatives, banks were directed to give greater focus to these schemes. Sitharaman said all existing and arising vacancies must be filled as soon as possible to deliver better service. Banks were encouraged to scale up branch expansion in underserved areas like the Northeast. The finance minister underlined the need to strengthen the business correspondent (BC) network to ensure last-mile access to banking services, particularly in rural and remote areas. An official said banks were also advised to check mis-selling of insurance products.
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Business Standard
17 hours ago
- Business
- Business Standard
FM asks PSBs to step up deposit mobilisation, deepen corporate lending
Union Finance Minister Nirmala Sitharaman on Friday told public sector banks (PSBs) that sustained efforts are needed to improve deposit mobilisation to support ongoing credit growth. She also emphasised the need to deepen corporate lending in productive sectors while maintaining robust underwriting and risk management standards. The finance minister chaired a high-level meeting in New Delhi to review the performance of PSBs for FY2024–25. Key areas discussed included financial parameters, credit offtake, financial inclusion, customer service, grievance redressal, digital banking, and cyber security. The meeting was attended by Union Minister of State for Finance Pankaj Chaudhary; Secretary, Department of Financial Services, M Nagaraju; managing directors of PSBs; and senior officials of the Department of Financial Services (DFS). 'PSBs were advised to undertake special drives, make effective use of their branch networks, and deepen outreach in semi-urban and rural areas,' the finance ministry said. The finance minister also directed banks to ensure faster grievance redressal, offer simplified digital platforms, and provide multilingual services both online and offline. 'Maintaining clean, customer-friendly physical branches and expanding in metro and urban centres to keep pace with urbanisation was also highlighted,' the finance ministry added. During the same period, net non-performing assets (NPAs) of PSBs declined sharply from 1.24 per cent to 0.52 per cent. Net profit increased from ₹1.04 lakh crore to ₹1.78 lakh crore, and dividend payouts rose from ₹20,964 crore to ₹34,990 crore. Sitharaman was also apprised that PSBs are adequately capitalised, with their capital to risk-weighted asset ratio (CRAR) standing at 16.15 per cent as of March 2025. She highlighted the importance of adequate staffing in banks, stressing that all existing and arising vacancies must be filled promptly to improve service delivery. Banks were also encouraged to scale up branch expansion in underserved areas such as the North-east. The finance minister underlined the need to strengthen the Business Correspondent (BC) network to ensure last-mile access to banking services, especially in rural and remote regions. Sitharaman was briefed on the progress under the New Credit Assessment Model for MSMEs, launched on 6 March 2025, under which 1.97 lakh MSME loans amounting to ₹60,000 crore have already been sanctioned. Banks were instructed to scale up implementation of the model to broaden access to capital and expedite credit flow to small and medium businesses. 'The finance minister has asked banks to increase aggressive lending following the interest rate cuts. Banks should provide loans to as many people as possible and focus on higher lending compared to last year,' a source said. Banks were also advised to expand their presence in GIFT City to support India's ambitions in international financial services, explore global opportunities, and increase participation in the India International Bullion Exchange (IIBX). On Thursday, Sitharaman chaired a meeting in Gandhinagar, Gujarat, with officials of GIFT City and the International Financial Services Centres Authority (IFSCA). 'Lending to the energy sector, particularly in renewable and sustainable areas, was underscored as a national priority to advance India's green growth agenda. In line with the Budget 2025–26 announcement to develop indigenously designed small modular nuclear reactors (SMRs), banks were advised to develop credit models to support this critical sector,' the finance ministry added.
Business Standard
19 hours ago
- Business
- Business Standard
Finance Minister urges PSU banks to boost credit growth, maintain profits
During a meeting to review financial performance of PSBs, Sitharaman asked their chiefs to maintain profitability momentum in FY26, sources said Press Trust of India New Delhi Finance Minister Nirmala Sitharaman on Friday asked public sector banks (PSBs) to take advantage of Reserve Bank's jumbo 50 basis points rate cut to increase lending toward productive sectors of the economy. During a meeting to review financial performance of PSBs, Sitharaman asked their chiefs to maintain profitability momentum in FY26, sources said. Cumulative profit of 12 PSBs rose to record Rs 1.78 lakh crore in FY25, registering a growth of 26 per cent over the previous year. The year-on-year increase in profit in absolute terms was about Rs 37,100 crore in FY25. According to sources, the minister expected that PSBs credit growth should improve post 50-bps rate cut by RBI. Banks were also directed to try maintain the FY25 credit growth level or increase during the current financial year. On June 6, the RBI's six-member monetary policy committee, headed by Governor Sanjay Malhotra lowered the benchmark repurchase or repo rate by 50 basis points to 5.5 per cent. It also slashed the cash reserve ratio by 100 basis points to 3 per cent in tranches that will add Rs 2.5 lakh crore to already surplus liquidity in the banking system. She also emphasised that banks should also onboard more customers on government's schemes in a bid to increase financial inclusion. Comprehensive review of various segments and progress in government schemes including Kisan Credit Card, PM Mudra and three social security schemes -- Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana (APY) were done during the meeting. Besides, the banks were also advised to work on ways to garner more low cost deposits. On the asset quality side, the finance minister appreciated the low level of non-performing assets in the banking sector and exuded confidence that the top management will ensure to keep it at that level.
Time of India
21 hours ago
- Business
- Time of India
Finance Minister nudges PSU banks to raise credit growth, maintain profitability
Finance Minister Nirmala Sitharaman on Friday asked public sector banks (PSBs) to take advantage of Reserve Bank's jumbo 50 basis points rate cut to increase lending toward productive sectors of the economy. During a meeting to review financial performance of PSBs, Sitharaman asked their chiefs to maintain profitability momentum in FY26, sources said. Cumulative profit of 12 PSBs rose to record Rs 1.78 lakh crore in FY25, registering a growth of 26 per cent over the previous year. The year-on-year increase in profit in absolute terms was about Rs 37,100 crore in FY25. According to sources, the minister expected that PSBs credit growth should improve post 50-bps rate cut by RBI. Banks were also directed to try maintain the FY25 credit growth level or increase during the current financial year. On June 6, the RBI's six-member monetary policy committee, headed by Governor Sanjay Malhotra lowered the benchmark repurchase or repo rate by 50 basis points to 5.5 per cent. Live Events It also slashed the cash reserve ratio by 100 basis points to 3 per cent in tranches that will add Rs 2.5 lakh crore to already surplus liquidity in the banking system. She also emphasised that banks should also onboard more customers on government's schemes in a bid to increase financial inclusion. Comprehensive review of various segments and progress in government schemes including Kisan Credit Card, PM Mudra and three social security schemes -- Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana (APY) were done during the meeting. Besides, the banks were also advised to work on ways to garner more low cost deposits. On the asset quality side, the finance minister appreciated the low level of non-performing assets in the banking sector and exuded confidence that the top management will ensure to keep it at that level.
