She said that PSBs are operating from a position of considerably greater strength and that the task now is “to identify opportunities early, build capabilities ahead of demand and ensure that our institutions remain at the forefront of India’s next phase of economic growth”.
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In her closing remarks at the end of the two-day PSB Confluence, Sitharaman also asked the lenders to consider launching a focused, month-long ‘Banking for Youth‘ campaign starting October 2, with particular outreach to young citizens aged 16 and above.
She said the initiative should seek to establish a sustained relationship with young customers and enable banks to support their evolving financial needs as they progress through education, employment, entrepreneurship, investment and wealth creation.
The finance minister said the larger objective of the campaign should be to build a long-term banking relationship from campus to career and beyond, rather than a one-time account-opening engagement. Sitharaman pointed out the shortfall in priority sector lending (PSL) and said that the banks’ approach to dealing with this should be a lot more robust. She also exhorted them to improve the quality of PSL.”Credit to farmers, MSMEs (micro, small and medium enterprises), MUDRA (Micro Units Development and Refinance Agency) beneficiaries, weaker sections and disadvantaged communities remains a top priority of this government,” she said adding that its success should be assessed not merely by numerical targets but by whether the credit is timely, adequate and productive.
She said banks must widen their reach and ensure that institutional credit enables small and marginal farmers to raise productivity, diversify cultivation, adopt better technology and connect with remunerative markets.
“The objective should ultimately be to ensure genuine and productive credit flow to the intended beneficiaries,” she said, adding that PSL should be seen as an opportunity to deepen formal credit, expand the customer base, create stronger enterprises and support broad-based economic growth. Sitharaman also said that financing strategies must be specific to local agricultural conditions and that there cannot be one-size-fits-all. “Credit products must therefore reflect the crops, climate, water availability and production conditions of each area,” she said.