(Indian Express)
Finance Minister Nirmala Sitharaman on Monday asked public sector banks (PSBs) to launch special drives to mobilise deposits by ‘connecting’ with customers with a view to narrowing the widening credit-deposit gap. She also told them to expedite the rollout of a new credit assessment model for MSMEs, based on their digital footprints and step up loans to beneficiaries for government schemes like household rooftop solar programme.
During a review performance with the PSB chiefs, Sitharaman said mobilisation of deposits could further be improved to fund the credit growth sustainably. She also advised PSBs to have better customer relationships for efficient customer service delivery.
The minister specifically asked bank chiefs to ensure that bank employees reach out to connect with their customers, especially in rural and semi-urban areas. Sitharaman appreciated the performance of PSBs in FY24. In the last financial year, the PSBs’ net non-performing assets stood at 0.76 per cent, capital adequacy at 15.55 per cent, net interest margin at 3.22 per cent, and highest ever net aggregate profit of Rs 1.45 trillion. They have paid a dividend of Rs 27,830 crore to the shareholders. Improvements over various parameters have also enhanced the ability of PSBs to raise capital from the markets, she said.
She asked the banks to expeditiously implement the recent Budget announcement of a new credit assessment model for MSMEs based on digital footprints and cash flows. This is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria. That will also increase coverage of MSMEs without a formal accounting system.
