Finance Minister Nirmala Sitharaman has urged public sector banks (PSBs) to increase lending to rural areas, agriculture, and specific sectors to meet Priority Sector Lending (PSL) norms. While overall PSL targets have been exceeded, Sitharaman emphasized the need to meet targets in sub-categories, particularly for small and marginal farmers and micro-enterprises. Read More Business News on our website.
FM Nirmala Sitharaman Encourages PSBs to Boost Rural and Agriculture Lending
PSBs have shown improved performance in terms of credit deployment, profitability, asset quality, and capital adequacy. The asset quality of PSBs has significantly improved, with gross non-performing assets (NPAs) at 4.97% and net NPAs at 1.24% in March 2023. PSBs also earned a record aggregate net profit of around Rs 1.05 trillion in the fiscal year 2022-23. The Ministry of Finance stated that PSBs are well-positioned to support the credit needs of the growing economy, with strong financial health indicated by a high Capital Risk Assets Ratio (CRAR) of 15.53% and healthy provision coverage of 90.68%.
PSBs are expected to withstand macroeconomic shocks. The ministry emphasized the importance of transparent recognition of NPAs and urged banks to meet credit targets for street vendors under the Pradhan Mantri Street Vendor’s Atmanirbhar Nidhi (PMSVANidhi) scheme. Minister Sitharaman also announced plans to review the functioning and technological upgradation of Regional Rural Banks (RRBs) in different regions of the country. Sponsor banks of RRBs were instructed to ensure timely technological upgradation and monitor their functioning for increased efficiency, benefiting people in rural areas.
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