News Brief

FM Sitharaman Urges PSBs To Step Up Lending After RBI's 50 Points Rate Cut

Arzoo Yadav

Jun 28, 2025, 04:08 PM | Updated 04:08 PM IST


Nirmala Sitharaman  (X/@nsitharamanoffc)
Nirmala Sitharaman (X/@nsitharamanoffc)

Union Finance Minister Nirmala Sitharaman has asked public sector banks (PSBs) to increase lending following the Reserve Bank of India's recent interest rate cut, aiming to stimulate economic growth, reported Mint.

The RBI earlier this month reduced its key repo rate by 50 basis points, creating an opportunity for increased credit flow.

Sitharaman also urged banks to boost lending to micro, small and medium enterprises, improve deposit mobilisation, while also instructing financial institutions to scale up efforts under key financial inclusion schemes, including PM MUDRA Yojana, PM Vishwakarma, PM Surya Ghar Muft Bijli Yojana, PM Vidyalaxmi, and the Kisan Credit Card (KCC) scheme.

During a high-level meeting in Delhi on Friday (27 June), the Finance Minister reviewed PSBs' financial performance, credit uptake, financial inclusion initiatives, and customer service.

She acknowledged the strong financial performance of PSBs from FY23 to FY25, noting a rise in total business from Rs 203 trillion to Rs 251 trillion, a decline in net NPAs from 1.24 per cent to 0.52 per cent, and an increase in net profit from Rs 1.04 trillion to Rs 1.78 trillion.

PSBs also maintain adequate capitalisation with a 16.15 per cent capital to risk-weighted assets ratio as of March.

Sitharaman emphasised the need for sustained efforts in deposit mobilisation and urged banks to identify emerging commercial growth areas.

She stressed deepening corporate lending in productive sectors, especially in renewable and sustainable energy, and advised banks to develop credit models for small modular nuclear reactors.

She also encouraged focus on agri-credit in 100 low-crop productivity districts under the PM Dhan Dhanya Yojana.

To enhance customer experience, Sitharaman directed banks to ensure faster grievance redressal, simplified digital platforms, and multilingual services.

She instructed PSBs to actively participate in the upcoming three-month financial inclusion saturation campaign, focusing on KYC compliance and unclaimed deposits.

She also directed filling all existing and arising vacancies promptly and strengthening the business correspondent network for last-mile access.

Also Read : Pushkar Singh Dhami Hits Milestone In Uttarakhand Politics, Becomes Longest-Serving BJP CM In State's History


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