Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, chaired a high-level review meeting in New Delhi today to assess the performance of Public Sector Banks (PSBs) across various critical areas. These included financial health, credit growth, financial inclusion, customer service, grievance redressal, digital transformation, and cyber security.

The meeting saw the participation of Minister of State for Finance Shri Pankaj Chaudhary, Secretary of the Department of Financial Services Shri M. Nagaraju, Managing Directors of Public Sector Banks, and senior DFS officials.

Strong Financial Performance by PSBs

Smt. Sitharaman recognized the strong financial performance of Public Sector Banks in recent years, especially during FY 2024–25. Notable highlights were:

• Total Business of PSBs surged from ₹203 lakh crore in FY 2022–23 to ₹251 crore in FY 2024–25.
• Net NPAs dropped significantly from 1.24% to 0.52%reflecting better asset quality.
• Net Profit jumped from ₹1.04 lakh crore to ₹1.78 croreand
• Dividend payouts increased from ₹20,964 crore to ₹34,990 crore.
• The Capital to Risk-Weighted Asset Ratio (CRAR) stood at a healthy 16.15% as of March 2025.

Strategic Direction and Credit Expansion

During the meeting, the Finance Minister highlighted the need to boost deposit mobilisation to sustain ongoing credit growth. She urged Public Sector Banks to make better use of their widespread branch network to enhance outreach in semi-urban and rural regions.

FM encouraged banks to identify emerging commercial growth areas over the next decade to strengthen profitability and long-term relevance. Particular focus was placed on:

• Corporate lending in productive sectors with strong risk management.
• Lending to the energy sectorespecially renewable and sustainable energy.
• Support for small modular nuclear reactors (SMRs)aligning with the Budget 2025–26 initiatives.

Boosting Financial Inclusion and Agricultural Credit

Smt. Sitharaman urged banks to scale up efforts under key financial inclusion initiatives like:

• PM Mudra Yojana
• PM Vishwakarma
• PM Surya Ghar Muft Bijli Yojana
• PM Vidyalaxmi
• Kisan Credit Card (KCC)

She also highlighted the need to focus on 100 low crop productivity districts under PM Dhan Dhanya Yojanadirecting banks to design special credit products to uplift agri-productivity and local economies.

Digital Banking, Cybersecurity & Customer Service

FM Sitharaman laid emphasis on customer-centric reforms:

• Enhance grievance redressal systems.
• Offer multilingual, simplified digital platforms.
• Ensure clean, welcoming, and customer-friendly branches, especially in metropolitan areas.

Banks were instructed to enhance cybersecurity measures, stay ahead of emerging threats, and upgrade their digital banking infrastructure.

GIFT City, Bullion Exchange & Global Presence

FM encouraged PSBs to expand operations in GIFT Cityparticipate in the India International Bullion Exchange (IIBX)and tap into global financial services. This aligns with India’s vision to be a global financial hub.

Upcoming Financial Inclusion Saturation Campaign

A three-month Financial Inclusion campaign beginning July 1, 2025will cover 2.7 lakh Gram Panchayats and Urban Local Bodies. Banks were directed to:

• Assist citizens with KYC, re-KYCand unclaimed deposits.
• Deploy adequate manpower and launch robust publicity efforts to strengthen outreach for schemes such as PM Jan Dhan Yojana, PM Jeevan Jyoti Bima, and PM Suraksha Bima Yojana.

MSMEs, Startups & Education Loans

The Finance Minister reviewed the progress of the New Credit Assessment Model for MSMEswhich has sanctioned 1.97 lakh loans totaling ₹60,000 crore since its launch in March 2025. She emphasized the need to scale up the model further to expand access to capital for small and medium enterprises.

Progress under key schemes was also noted:

• Under the Stand-Up India scheme, 2.28 lakh loans have been sanctioned, amounting to a total of ₹51,192 crore.
• PM Vidya Lakshmi: 6,682 applications sanctioned worth ₹1,751 crore.

The Finance Minister emphasized the need to strengthen these initiatives to promote entrepreneurship and expand access to higher education.

Staffing, Outreach, and Underserved Regions

Highlighting the need for efficient banking services, the Finance Minister called for immediate filling of vacancies and expansion of PSB presence in underserved regions, especially in the North-East.

Banks were also directed to strengthen their Business Correspondent (BC) networks to ensure last-mile banking access.

Conclusion

With a strong emphasis on growth, inclusion, digital transformation, and national priorities, Smt. Nirmala Sitharaman’s review meeting highlighted the vital role of Public Sector Banks in driving India’s economic progress. Backed by ongoing reforms, innovation, and expanded outreach, PSBs are poised to make a deeper impact across society and support the country’s development agenda.