Public Sector Banks must focus on capital strength, cost efficiency: Govt

Public sector banks must plan for appropriate and timely capital raising and strive to reduce intermediation costs to make banking products and services, particularly credit-related, affordable to the public, said M Nagaraju, secretary of the department of financial services on Monday. He was addressing bankers at the 77th annual general meeting of the Indian Banks' Association (IBA).

«Each bank needs to identify its focus on building capacity and planning road maps for appropriate and timely capital raising or efficient allocation of resources, besides striving to bring down intermediation costs,» Nagaraju said.

Speaking at the same event, State Bank of India chairman CS Setty said as new and unfamiliar industries emerge, banks must develop the expertise to assess these evolving business models and lending risks.

«Robust risk management, fraud prevention, and a culture of innovation will be key pillars in this journey. As we move forward, our focus must be on operational efficiency, cutting tech, and customer-centric solutions that redefine banking experiences,» he said.

Nagaraju also said that banks need to collaborate on business and efficiency gains due to inherent similarities among them on multiple matters. Some of these initiatives could be in areas such as cyber security, technological platforms for risk management, introducing and strengthening applications of artificial intelligence (AI), fintech incubation, acceleration and cloud services.

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«The synergy arising out of these will be able