Finance minister Nirmala Sitharaman will likely review the performance of the public sector banks (PSBs) on June 27 in various parameters, including profitability, bad loans recovery, deposit mobilisation, digital payments, cyber security and implementation of government schemes, sources told FE.
The meeting assumes importance after the Reserve Bank of India (RBI) in its monetary policy review on June 6, delivered a larger-than-expected 50 bps repo rate cut and a phased 100 bps cut in the cash reserve ratio (CRR).
In the meeting with the PSB chiefs, the minister will likely take note of the adequate capital buffers, aggregate capital to risk-weighted assets ratios of the banks, among others.
PSBs are adequately capitalised and well poised to meet the credit demands of all sectors of the economy, with special thrust on agriculture, MSME and the infrastructure sector.
It is to be noted that 12 PSBs have recorded a robust 26% annual growth in net profit at Rs 1.78 lakh crore in 2024-25 compared with Rs 1.41 lakh crore in 2023-24.
The implementation of new credit products or schemes and access to credit under financial inclusion will also likely be discussed. The meeting may also delve into joint efforts of banks with regulators and security agencies against fraud and cybersecurity risks.
The review will also likely cover progress on further increasing credit flow to eligible beneficiaries under initiatives like PM Surya Ghar Muft Bijli Yojana, PM Vishwakarma Yojana, Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).
The government has rolled out several credit enhancement schemes, including a new credit assessment model for MSMEs based on digital footprints and cash flows.
The government’s nudge for reforms has resulted in enhanced systems and processes for credit discipline, recognition and resolution of stressed assets, responsible lending, improved governance, financial inclusion initiatives and technology adoption, sources said.