Finance Minister Nirmala Sitharaman held an annual review meeting on Friday, June 27, with the heads of public sector banks (PSBs). She met with the heads of these banks to check how they are doing financially.
Key points Finance Minister asked the banks to follow:
- The Finance Minister asked banks to increase lending more than they did last year as now that borrowing has become cheaper because of the RBI’s rate cut. Lending more helps businesses grow and supports the economy.
- The Finance Minister asked banks to increase the amount of money they lend, especially more than they did last year. Lending more helps businesses grow and supports the economy.
- She asked banks to support and get more customers to sign up for government financial inclusion programs like Kisan Credit Card (for farmers), PM Mudra Yojana (for small businesses), and Social security schemes like life and accident insurance and the Atal Pension Yojana.
- She specifically asked banks to give more support to small and medium-sized businesses (called MSMEs), which are important for jobs and the economy. Prominent lenders like SBI, Bank of Baroda, and HDFC Bank have already lowered their external benchmark-linked and MCLR lending rates by the full amount
- She asked to keep the amount of NPAs (called bad loans) under control, which already has gone down. Now, only 0.52% of loans are considered bad, which shows banks are managing their money better.
- She asked banks to get more money from low-cost deposits (such as savings and current accounts) as these types of banks cost less for the bank .
- She said banks need to treat customers better, provide services on time, and make banking easier for everyone, especially in remote areas.
RBI’s Past Measures to Support Strong Economic Growth
- On June 6, 2025, the RBI’s Monetary Policy Committee lowered the repo rate by 50 bps to 5.50%.
- Lowered the cash reserve banks by 100 bps to 3%.
- Many people have money stuck in old bank accounts, insurance, pensions, or stocks they forgot about or didn’t know how to claim. She asked financial bodies like the RBI and SEBI to work together and run special drives to return this unclaimed money to the rightful owners.
- She asked to make KYC rules simpler so that more people can easily access financial services.
The goal is to use the favorable economic conditions to boost credit, maintain profits, and include more people in the formal banking system, while managing risks properly. She wants to make India’s financial system stronger and more citizen-friendly. The banks reported a record profit of ₹1.78 lakh crore in the financial year 2024–25, which is a 26% increase from the previous year. She asked banks to keep up this level of profitability. This meeting was part of the government’s regular work to make sure banks are helping meet India’s economic goals.