At a meeting conducted to review the performance of Public Sector Banks (PSBs) on Monday, Finance Minister Nirmala Sitharaman discussed a range of issues including financial parameters, deposit mobilisation, digital payments and cyber security framework.

Nirmala Sitharaman also advised that issues of cyber security should be seen from a systemic perspective and emphasised that a collaborative approach between banks, Government, regulators and security agencies is needed to put in place necessary mitigants against cyber-risks.

She further urged that every aspect of the IT system should be reviewed periodically and thoroughly from the cyber security angle to ensure that the security of the bank systems is not breached or compromised.

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.

At the meeting, it was noted that during FY24, the PSBs performed well across all financial parameters as evidenced by improved asset quality with Net NPAs (NNPAs) declining to 0.76 per cent, sound capital adequacy of the banks at 15.55 per cent.

Further, the Net Interest Margin (NIM) of the banks is at 3.22 per cent, and the highest ever net aggregate profit of Rs 1.45 lakh crore with the dividend of Rs 27,830 crore to the shareholders was recorded in FY24.

“Improvements over various parameters have also enhanced the ability of PSBs to raise capital from the markets,” it was discussed.

Minister Sitharaman also advised PSBs to have better relationships with their customers for efficient customer service delivery.

She urged Banks to ensure that employees reach out to connect with their customers, especially in Rural and Semi-urban areas.

Further, she urged the PSBs to explore collaboration to leverage the respective strengths by sharing best practices in emerging areas and equip themselves to keep pace with changes in the banking sector.

She noted that the government, through various schemes, has always endeavoured to facilitate credit access to citizens at the bottom of the pyramid to support their livelihood and improve lives.

Minister further asked the banks to expeditiously implement the recent Budget announcements, including, a new credit assessment model for MSMEs based on digital footprints and cash-flows.

Banks were also instructed by the Union Finance Minister to focus on further increasing credit flow to eligible beneficiaries under various Union Government initiatives like PM Surya Ghar Muft Bijli Yojana and PM Vishwakarma Yojana.

The meeting was also attended by Dr Vivek Joshi, Secretary; M. Nagaraju, Secretary-Designate, Department of Financial Services; Heads of Public Sector Banks (PSBs) besides senior officials of Department of Financial Services (DFS).