Banks Urged to Focus on Lending and Innovative Deposit Schemes: Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman has made a strong appeal to banks to prioritize their core functions, focusing on increasing lending and introducing new, attractive deposit schemes. 🏦💰
Speaking at a meeting with the Reserve Bank of India’s (RBI) Board of Directors, Sitharaman emphasized the need for banks to draw the attention of domestic savers who are increasingly looking towards other investment options. She highlighted the importance of capturing the interest of these savers through innovative financial products.
After addressing the Board meeting, the Finance Minister, accompanied by the Minister of State for Finance and the Governor of the Reserve Bank, spoke to the media. She reiterated that both the RBI and the government are urging banks to concentrate on their main business activities. This includes aggressively increasing deposit amounts and providing more loans.
Sitharaman pointed out that traditionally, after the budget, she addresses the RBI’s Board of Directors meeting. She mentioned that the RBI has given banks some freedom in managing interest rates. Banks should utilize this flexibility to make their deposit schemes more attractive. They should introduce new products and focus on gathering more deposits. Additionally, she urged bank officials to pay special attention to small savers rather than focusing solely on large or bulk deposits. 📈💡
RBI Governor Shaktikanta Das, who was present at the meeting, added that there is currently a gap of about three to four percent between deposit growth and loan growth, with deposits lagging behind. He noted that while loans are now being issued digitally, the same level of innovation hasn’t been applied to deposit schemes. Das emphasized the need for banks to concentrate on unique products to attract deposits, pointing out that the ratio of loans to deposits has increased. 📊🔍
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