FM Nirmala Sitharaman reviews performance of Public Sector Banks

Union Finance Minister Nirmala Sitharaman on Monday reviewed the performance of Public Sector Banks at a meeting in New Delhi. It was attended by Secretary,  Department of Financial Services Dr. Vivek Joshi, Managing Directors and Chief Executive Officer of Public Sector Banks and other senior officials. During the meeting, Ms Sitharaman reviewed deposit growth, the credit-to-deposit ratio, and asset quality, which are vital indicators of the banks’ health.

The Finance Minister also evaluated the performance of Public Sector Banks under government initiatives such as PM Awas Yojana, PM Surya Ghar and PM Vishwakarma schemes. This is Ms Sitharaman’s first review meeting of banks after assuming charge as Finance Minister in the Modi government’s third term.

Finance Minister Nirmala Sitharaman also chaired a review meeting of Regional Rural Banks RRBs in New Delhi on Monday (19th August 2024). The meeting, with all 43 present RRBs, focused on business performance, upgrading digital technology services, and fostering business growth in MSME clusters.

Given the crucial role of RRBs in supporting the rural economy, Ms Sitharaman urged RRBs – with the active support of their Sponsor Banks – to also put greater thrust on the clear identification of beneficiaries while sanctioning loans



under various schemes such as PM Vishwakarma and PM Surya Ghar Muft Bijli Yojana. RRBs were also directed to increase their share in ground-level agriculture credit disbursement.

The Finance Minister underlined that all RRBs must have their own up-to-date technology stack to stay relevant and noted that digital banking services like mobile banking will be a boon for regions with relatively challenging physical connectivity like North Eastern states and hilly region).

Ms Sitharaman exhorted all the RRBs to devise suitable MSME products aligning with their cluster activities and leverage personal and local connect to increase banking penetration. SIDBI was directed to assist RRBs in exploring co-lending or risk-sharing models and extending refinance for the MSME portfolio.

Ms Sitharaman also asked Sponsor Banks and RRBs to recognise the challenges that lie ahead and to continue focusing on maintaining asset quality, expanding digital services, and ensuring robust corporate governance.

The meeting was also attended by the Secretary-Designate, Department of Financial Services, Additional Secretary, other senior officials from the DFS, representatives of RBI, SIDBI, NABARD, Chairpersons of RRBs and CEOs of sponsor banks.