The Department of Financial Services (DFS), Ministry of Finance, Government of India recently conducted a meeting with Chiefs of Public Sector Banks on Thursday. The meeting took place at the scheduled date and time with the presence of senior officials of DFS and MD&CEO of Public Sector Banks. The meeting was chaired by the Department of Financial Services (DFS) Secretary M Nagaraju. Let’s read what happened in the meeting.
As per the sources, the Union finance ministry has asked public sector banks (PSBs) to work on strategies to improve deposit mobilization. The banking sector is suffering from Liquidity crisis as the public is now not investing much money in Bank FD. Instead, they are investing their money in the stock market and mutual funds to earn more interest. Recently, RBI also took notice of this liquidity crisis and announced to inject liquidity into the banking sector. The Finance Ministry has asked Banks to create strategies for deposit mobilization and share them with Finance Ministry at the earliest.
“The finance ministry has raised that mobilising bank deposits is the issue for the sector. Hence only proper strategy will solve the issue,” as per sources.
The progress of Financial Schemes was also discussed in the meeting. Banks have been asked to execute major financial inclusion schemes aggressively such as the Credit Guarantee Fund Scheme for Skill Development, MUDRA (Micro Units Development and Refinance Agency) loan for homestays, Pradhan Mantri Matsya Kisan Samridhi Sah-Yojana, and Kisan Credit Card. The finance ministry has also asked for aid from the Fisheries and Aquaculture Infrastructure Development Fund to develop infrastructure for the fisheries sector.
“A centralised digital portal may be launched to facilitate real-time tracking of loan applications, subsidies, and financial support for fisheries entrepreneurs,” as per sources.
This time, Chiefs of some private sector banks were also called in the meeting. The finance ministry has instructed private sector banks to increase their participation in financial inclusion and government schemes. Most of the public welfare schemes are run by the government banks and private banks have only little to no participation in these welfare schemes. The government has asked private sector banks also to increase the implementation of government schemes.
Apart from this, a regular review of cases of the National Asset Reconstruction Company was also carried out in the meeting.
PSBs have seen an aggregate business growth of 11 percent year-on-year (Y-o-Y) with improved aggregate deposit growth at 9.8 percent Y-o-Y. The total aggregate business of PSBs has reached Rs 242.27 trillion. However, there is robust credit growth of 12.4 percent, led by retail credit growth of 16.6 percent, agricultural credit growth of 12.9 percent, and micro, small, and medium enterprise (MSME) credit growth of 12.5 percent.
PSBs have recorded a net profit growth of 31.3 percent Y-o-Y to achieve the highest-ever aggregate net profit of Rs 1.29 trillion and aggregate operating profit of Rs 2.2 trillion in the first nine months of the financial year.
