Union Finance Minister Nirmala Sitharaman on Monday urged the banks to make concerted efforts to garner deposits by conducting special drives.
The minister’s remarks came at a meeting to review the performance of Public Sector Banks (PSBs) on their financial parameters, deposit mobilisation, digital payments and cyber security framework.
The review meet chaired by the Finance Minister also discussed the access to credit under financial inclusion and other emerging issues related to PSBs.
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.
Key metrics highlight PSBs growth
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%, sound capital adequacy of the banks at 15.55%.
Further, the Net Interest Margin (NIM) of the banks is at 3.22%, and 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.
Notably, earlier in the day, a report released by the SBI also said that with continued economic activity in post pandemic period, the credit cycle has reversed in December 2021 and continue to grow upward.
“Deposit growth also reached an all time high in FY23 but credit growth surpassed deposits due to higher demand for bank credit,” it added.
Also Read: Bank deposit growth at all time high, expanded by Rs 61 trln since FY22: SBI Report
Focus on customer relationship
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 banking sector.
Bats for collective approach on cyber security
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.
