FM Sitharaman chaired annual review meeting with MDs and CEOs of Public Sector Banks, Read Meeting Highlights

Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman chaired a high-level annual performance review meeting with the Managing Directors and CEOs of all Public Sector Banks (PSBs).

The meeting focused on key areas like:

• Financial performance
• Inclusive lending and financial inclusion
• Cybersecurity
• Customer service and innovation

Strong Financial Performance of PSBs

• In FY 2024–25, Public Sector Banks recorded a record net profit of ₹1.78 lakh crore.
• Net Non-Performing Assets (NNPAs) came down to 0.52%, a multi-year low. This shows better control over bad loans and improved financial health.
• The total business of PSBs (deposits + loans) increased from ₹203 lakh crore in FY 2022–23 to ₹251 lakh crore in FY 2024–25.
• Dividend payouts by PSBs increased from ₹20,964 crore to ₹34,990 crore over the same period.
• Banks are financially strong with a Capital to Risk (Weighted) Assets Ratio (CRAR) of 16.15% as of March 2025.

Key Instructions and Directions by the Finance Minister

1. Financial Inclusion Campaign

• Starting July 1, 2025, PSBs must actively take part in a 3-month financial inclusion campaign.
• It will cover 2.7 lakh Gram Panchayats and Urban Local Bodies.
• Focus areas: KYC updates, re-KYC, and helping citizens claim unclaimed deposits.

2. Improving Deposit Mobilization

• Banks should increase efforts to mobilize more deposits to support rising demand for loans.
• They were told to conduct special drives, leverage branch networks, and reach out more in rural and semi-urban areas.

3. Support for Key Credit Schemes

Banks were instructed to scale up lending under the following schemes:

• PM MUDRA Yojana
• PM Vishwakarma
• PM Surya Ghar Muft Bijli Yojana
• PM Vidyalakshmi
• Kisan Credit Card (KCC)

4. Focus on Agriculture in Low-Productivity Districts

• Under the PM Dhan Dhanya Yojana, banks must identify 100 low-agriculture productivity districts.
• They should create special credit products for farmers in these areas to improve crop yields and local economies.

5. New Credit Assessment for MSMEs

• A new credit model for MSMEs was launched on March 6, 2025.
• So far, 1.97 lakh MSME loans have been sanctioned worth ₹60,000 crore.
• Banks were told to implement this model more strongly to make credit easier for small businesses.

6. Green & Renewable Energy Lending

• Lending to renewable energy projects is now a national priority.
• PSBs were encouraged to develop new credit models to support the Small Modular Nuclear Reactors (SMRs) as announced in the Budget 2025–26.

7. Boosting Corporate Lending

• Banks were asked to find new sectors with long-term growth potential and lend responsibly.
• Corporate lending should be increased with strong risk management practices.

8. Customer Service and Digital Innovation

• Banks must focus on:
  • Faster grievance redressal
  • Multilingual services (online and offline)
  • Easy-to-use digital platforms
  • Clean and customer-friendly physical branches
• Urban expansion should be scaled up to match rapid urbanisation.

Other Important Highlights

• GIFT City Presence: Banks should expand their operations in GIFT City (Gujarat) and take part in international platforms like the India International Bullion Exchange (IIBX).
• Stand Up India Scheme: 2.28 lakh loans sanctioned, worth ₹51,192 crore.
• PM Vidya Lakshmi Scheme: 6,682 education loan applications sanctioned, amounting to ₹1,751 crore.
• Vacancies in Banks: FM asked banks to quickly fill all staff vacancies to ensure better services.
• Banking Access in North-East: Banks were asked to open more branches in the North-East and strengthen the Business Correspondent (BC) network to provide banking in remote villages.