FM asks PSBs to launch special drives to push deposits growth
Sitharaman Monday asked public sector banks, or PSBs, to make concerted efforts to mobilise deposits by conducting special drives to sustainably fund credit growth.
Sitharaman reviewed the performance of PSBs and asked them to expeditiously implement recent budget announcements, including, a new credit assessment model for MSME (Micro, Small & Medium Enterprises) based on digital footprint and cash flows. Sitharaman, a finance ministry statement said, observed that while credit growth had picked up, mobilisation of deposits could be improved further.
The finance minister was reviewing the performance of PSBs on their financial parameters, deposit mobilisation, digital payments, cyber security framework, and access to credit under financial inclusion.
She had 10 days back told newspersons after addressing the RBI central board meeting that lenders need to focus on raising smaller deposits that come in «trickles» but were the «bread and butter» of the banking system, while flagging concerns over the widening gap between deposits and credit.
RBI governor Shaktikanta Das had highlighted that the low-cost current and savings accounts (CASA) of banks had declined from 43% of total deposits a year ago to 39% in the current fiscal. Das had earlier this month voiced similar sentiments, flagging how alternative investment avenues had become more attractive to retail customers.
«As a result, banks are taking greater recourse to short-term non-retail deposits and other instruments of liability to meet the incremental
