FM Nirmala Sitharaman Meets PSU Bank Heads To Discuss Financial Performance, Credit Growth

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Posted by AI on 2025-06-27 14:50:13 | Last Updated by AI on 2025-06-27 13:33:17

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Despite the RBI's recent monetary easing steps, Indian banks' financial performance and credit growth continue to concern the Finance Ministry. Today, Finance Minister Nirmala Sitharaman will meet with the heads of 24 state-owned banks (PSBs) to discuss key sectors and emerging opportunities to boost the economy.

The meeting will be the first formal interaction between PSB executives and the FM since the RBI lowered the benchmark interest rate by 0.25% and changed its monetary policy stance to "neutral" from "calibrated tightening." It also marked a significant shift in monetary policy, as the RBI reversed its previous tight monetary stance amid concerns about growth.

Previously, the RBI had hiked the key policy rate (repo rate) by 50 basis points since June 2018, to 6.50% in August 2018, in a bid to control inflation.

The finance minister will review the PSBs' financial performance and discuss initiatives to boost credit growth, especially to priority sectors such as agriculture, MSME, and housing. The ministry wants banks to leverage the easing monetary conditions and improve credit flow to critical sectors.

The interaction is crucial as it comes at a time when the economy is showing signs of recovery, with the Q2 FY20 GDP growth rate at 6.3%, and inflation is within the RBI's target range. The finance minister is expected to discuss the banks' strategies for promoting economic growth and ensuring that credit reaches deserving sectors and entities effectively.

It is worth noting that the PSBs have played a crucial role in the government's financial inclusion and economic development programs. They have also been working to improve their financial performance in recent years, including streamlining processes, addressing NPA challenges, and leveraging technology innovations.

With the latest monetary easing measures, the finance minister and PSB heads will likely discuss opportunities for further economic growth and development, especially in sectors that can make the most of lower interest rates.

It remains to be seen what initiatives the government and PSB banks will take to boost the economy moving forward.

Stay tuned to the latest developments in the economic and financial sectors with us.

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