FM Sitharaman Urges Banks: Prioritize Deposits, Fortify Cybersecurity for a Safer Future | Economy & Policy News
Finance Minister Nirmala Sitharaman Urges Banks to Enhance Deposits and Strengthen Customer Relations
Finance Minister Nirmala Sitharaman convened a significant meeting with public sector banks (PSBs) on Monday, emphasizing the need to mobilize deposits through "special drives" and bolster customer relationships. Addressing concerns over slower deposit growth compared to credit, the Finance Minister advised banks to utilize the resolution and recovery mechanisms provided by the National Company Law Tribunal (NCLT) and the National Asset Reconstruction Company Ltd (NARCL).
Recognizing the improved asset quality of PSBs, Sitharaman highlighted the necessity of ramping up deposits. In a separate session with regional rural banks (RRBs), the Finance Minister stressed the acceleration of the one state-one RRB initiative and highlighted cybersecurity as a critical focus area. Banks were urged to regularly review and upgrade their IT systems to prevent breaches and ensure compliance with RBI guidelines on loan closure.
The discussion also touched on the implementation of recent Union Budget announcements, including a new credit assessment model for MSMEs and initiatives like the PM Surya Ghar Muft Bijli Yojana and PM Vishwakarma Yojana. Banks were instructed to expedite beneficiary applications while adhering to due diligence.
The current fiscal year’s performance reviews revealed PSBs’ improved asset quality, with net non-performing assets (NNPAs) decreasing to 0.76%. Additional metrics showed a capital adequacy ratio of 15.55%, a net interest margin of 3.22%, and a record net aggregate profit of Rs 1.4 trillion, alongside significant dividends to shareholders.
RRBs were directed to upgrade digital technology services, particularly emphasizing mobile banking for regions with challenging connectivity, such as the northeastern states and hilly areas. Sitharaman underscored the important role of sponsor banks in providing technical assistance and facilitating credit access for MSMEs in various sectors. Furthermore, SIDBI was instructed to support RRBs in exploring co-lending and risk-sharing models.
The Finance Minister’s comprehensive approach prioritizes maintaining asset quality, expanding digital services, and ensuring robust corporate governance across both PSBs and RRBs.
First Published: Aug 19, 2024 | 9:25 PM IST
Original Story https://www.business-standard.com/economy/news/fm-calls-for-banks-to-boost-physical-customer-interaction-and-cybersecurity-124081900877_1.html
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