New Delhi, July 6 (SocialNews.XYZ) Finance Minister Nirmala Sitharaman on Thursday directed the public sector banks to increase the reach of priority sector lending in the agriculture sector, especially for small and marginal farmers, and micro enterprises.
Chairing a meeting to review the performance of public sector banks on various financial health parameters for 2022-23, the focus was mainly on positive macro trends, improved business sentiments, 'twin balance sheet advantage' and overall performance of state-owned banks.
Sitharaman emphasised on banks' adherence to the regulatory framework by focussing on risk management and diversification of the business base.
The business outlook is progressively improving in spite of the headwinds from recent global banking sector developments, it was noted in the meeting.
Sitharaman further asked banks to meet the targets for credit to street vendors under PMSVANidhi scheme.
She added that the momentum of disbursals gained under PMSVANidhi should be sustained.
The Finance Minister further asked them to see that there is a fair and transparent recognition of non-performing assets (NPAs) as per the extant guidelines of the regulator.
She also said that banks should periodically review NPAs internally to ensure that there is proper recognition and reporting of stressed assets.
The sponsor banks of the regional rural banks (RRBs) should ensure a time-bound technological upgradation of RRBs and continuously monitor their functioning, to make them more efficient and effective, which will immensely benefit the people living in rural areas, Sitharaman told the banks' chiefs.
She even asked them to address associated business model risk with robust risk management practices and have efficient and optimum asset liability management.
In addition to this, Sitharaman directed them to take steps to improve deposits and adopt a focussed approach on ease of services and customer protection.
Meanwhile, it was noted that the asset quality of banks has improved significantly with gross NPAs at 4.97 per cent and net NPAs at 1.24 per cent in March 2023.
During 2022-23, public sector banks earned a record aggregate net profit of around Rs 1.05 lakh crore, almost triple from net profits earned in 2013-14.
Strengthened by high capital adequacy of 15.53 per cent CRAR (comparable to major economies of the world), clean balance sheets supported by a healthy provision coverage (90.68 per cent), and improved resilience, banks are well positioned to support the credit needs of the productive sectors of the growing economy.
Source: IANS
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