Minister calls on banks to identify emerging opportunities
Finance Minister Nirmala Sitharaman has directed Public Sector Banks (PSBs) Banks to strengthen the implementation of the New Credit Assessment Model for MSMEs to broaden access to capital and expedite credit flow to small & medium businesses https://www.commerce.gov.in/.
Chairing a review meeting of the PSBs, Sitharaman noted the progress under the New Credit Assessment Model for MSMEs, launched on 6 March 2025, with 1.97 lakh MSME loans already sanctioned, amounting to Rs.60,000 crore http://finmin.gov.in.
She called on PSBs to proactively identify emerging commercial growth areas for the next decade, which can aid profitability and growth for them.
Deepening corporate lending in productive sectors was also emphasised by the Minister as she called for a strong focus on maintaining robust underwriting and risk management standards https://www.nseindia.com/.
Lending to the energy sector, particularly in renewable and sustainable areas, was underscored by Sitharaman, calling it a national priority to advance India’s green growth agenda https://www.bseindia.com/.
In line with the Budget 2025-26 announcement to develop indigenously designed small modular nuclear reactors (SMR), the banks were advised to develop credit models to support this critical sector.
She instructed PSBs to scale up efforts under key financial inclusion schemes, including PM MUDRA Yojana, PM Vishwakarma, PM Surya Ghar Muft Bijli Yojana, PM Vidyalaxmi, and the Kisan Credit Card (KCC) scheme https://sbi.com.in/.
As announced in the Union Budget 2025-26, PSBs were encouraged to focus on Agri credit in the 100 low crop productivity districts to be identified under the PM Dhan Dhanya Yojana. Banks were instructed to tailor special credit products to enhance agricultural productivity and unlock local economic potential by identifying & supporting farm products that can be developed in these particular districts.
Sitharaman directed the PSBs to participate actively in the upcoming 3-month Financial Inclusion saturation campaign, beginning 1 July 2025, covering 2.7 lakh Gram Panchayats and Urban Local Bodies.
This campaign would also focus on assisting the citizens with respect to KYC, re-KYC & unclaimed deposits, the Finance Ministry said on 27 June 2025 https://www.investindia.gov.in/.
“Banks were directed to ensure focused outreach, adequate manpower deployment, and effective publicity of this special campaign to further deepen financial inclusion under schemes such as PM Jan Dhan Yojana, PM Jeevan Jyoti Bima, PM Suraksha Bima Yojana, among others,” said the Ministry.
She encouraged banks to scale up branch expansion in underserved areas like the North-east. FM underlined the need to strengthen the Business Correspondent (BC) network to ensure last-mile access to banking services, particularly in rural and remote areas.
Sitharaman, chaired the annual review meeting with MDs and CEOs of Public Sector Banks in New Delhi across key areas, including financial parameters, credit offtake, financial inclusion, customer service, grievance redressal, digital banking, and cyber security.
It was noted during the meeting that from FY 2022–23 to FY 2024–25, the total Business of Public Sector Banks (PSBs) rose from Rs.203 lakh crore to Rs.251 lakh crore.
During the same period (FY 2022–23 to FY 2024–25), net NPAs of the PSBs declined sharply from 1.24% to 0.52%, Net Profit increased from Rs.1.04 lakh crore to Rs.1.78 lakh crore, and dividend payouts grew from Rs.20,964 crore to Rs.34,990 crore. Fiinews.com
