Finance Minister Nirmala Sitharaman chaired the annual performance review of Public Sector Banks in New Delhi, highlighting their record net profit of Rs 1.78 lakh crore in FY 2024–25 and urging continued innovation, financial inclusion and support for national priorities. The meeting was attended by Minister of State Pankaj Chaudhary, DFS Secretary M. Nagaraju, bank MDs and senior officials.
Key metrics discussed included the sharp improvement in asset quality, with net NPAs declining to 0.52%, and the strengthening of capital buffers, with CRAR reaching 16.15%. Total business expanded from Rs 203 lakh crore in FY 2022–23 to Rs 251 lakh crore in FY 2024–25, while dividend payouts grew to Rs 34,990 crore.
Emphasising the importance of credit support for future growth engines, Sitharaman urged banks to identify emerging commercial sectors for the next decade and deepen corporate lending in productive areas. Special emphasis was placed on clean energy financing, particularly support for indigenously developed small modular nuclear reactors announced in the Union Budget 2025–26.
She reviewed deposit mobilisation trends and directed banks to leverage branch networks to expand in semi-urban and rural areas. Banks were advised to scale up financial inclusion schemes including PM MUDRA Yojana, PM Vishwakarma, Surya Ghar Muft Bijli Yojana, PM Vidyalaxmi and the Kisan Credit Card. Targeted agri-credit for 100 low-productivity districts under the PM Dhan Dhanya Yojana was also discussed, with a call to design customised loan products.
The Finance Minister reviewed implementation of the New Credit Assessment Model for MSMEs, under which 1.97 lakh loans worth Rs 60,000 crore have already been sanctioned. Banks were urged to scale up the model and speed up MSME financing. She also called for deeper focus on schemes like Stand Up India and Vidya Lakshmi to support entrepreneurship and higher education.
Banks were directed to actively participate in the upcoming three-month Financial Inclusion Saturation Campaign beginning July 1, covering 2.7 lakh gram panchayats and urban bodies, with a focus on KYC outreach and unclaimed deposit resolution.
Improving customer experience remained a priority, with directions for simplified digital platforms, faster grievance redressal, multilingual services, and well-maintained branches in metro and urban areas. Sitharaman also called for aggressive expansion in underserved regions like the Northeast, enhanced staffing to fill vacancies, and strengthening of the business correspondent network for last-mile delivery.
She encouraged greater institutional presence in GIFT City and stronger participation in the India International Bullion Exchange, underscoring the importance of integrating Indian banks into the evolving global financial system.
