fm-nirmala-sitharaman-to-meet-psb-chiefs-for-annual-review

Public Sector Bank chiefs are expected to have an annual review meeting with Finance Minister Nirmala Sitharaman on Thursday to assess their performance in the financial year 2024-25. Various financial parameters like profit and non-performing assets (NPAs) are likely to be reviewed, say sources. 

The cumulative profits of PSBs surged to a record ₹1.78 trillion in FY25, registering a growth rate of 26 per cent over the previous year. All 12 PSBs saw profits of ₹1.41 trillion in FY24.

The review meeting, which will be attended by senior officials of the department of financial services, will also hold discussions on profitability, bad loans recovery, deposit mobilisation, digital payments, cyber security and implementation of government schemes.

The implementation of new credit products or schemes and access to credit under financial inclusion will likely be discussed as well. The meeting may also delve into joint efforts of banks with regulators and security agencies against fraud and cybersecurity risks amid heightened tension with Pakistan.

Banks performance 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) may also be reviewed. 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 meeting will likely take note of the adequate capital buffers, aggregate capital to risk-weighted assets ratio, among others.

Sources said 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.

The government’s focus on policy and process 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. 

The PSBs reported an aggregate net non-performing asset (NPA) ratio at Rs 61,252 crore or 0.59% till December 2024.