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Finance Minister Nirmala Sitharaman has asked public sector banks to improve deposit growth. The Finance Minister said this in a performance review meeting with the heads of public sector banks on Monday. In the last few months, loan growth has been 3-4 percent less than deposit growth, which has created an imbalance of asset liability for banks. According to the news of Bhasha, the Finance Minister reviewed the financial performance of the banks as well as the progress made in the implementation of various major schemes of the government including PM Awas Yojana, PM Surya Ghar, and PM Vishwakarma Yojana.
Appeal to introduce innovative products
According to the news, sources also said that Sitharaman also reviewed deposit growth, credit-deposit ratio (CD ratio), and asset liability (asset quality). The Finance Minister asked the heads of banks to focus on core banking business and increase the pace of deposit growth by introducing innovative products. She had said earlier this month that there is an imbalance between deposit and loan growth. The Finance Minister said that the growth in lending is higher.
Concerns related to cyber security and financial sector risks were also discussed
Sitharaman said the Reserve Bank of India (RBI) has given banks freedom in interest rate matters, and they should use this freedom to make deposits more attractive. Concerns related to cyber security and risks to the financial sector were also discussed during the meeting, sources said. Issues related to fraud and wilful defaulters and the progress of the National Asset Reconstruction Company Limited (NARCL) were also discussed, they said.
This was the first review meeting after the presentation of Budget 2024-25. The net profit of public sector banks has crossed Rs 1.4 lakh crore in the financial year ended March 2024, which is 35 percent more than the previous year.
