Union Finance Minister Smt. Nirmala Sitharaman recently chaired a meeting in New Delhi to assess the performance of Public Sector Banks (PSBs) across various parameters. The meeting, attended by Union Minister of State for Finance Dr Bhagwat Kishanrao Karad, Dr Vivek Joshi (Secretary, Department of Financial Services), and Heads of PSBs, addressed critical aspects of the banking sector.
A significant part of the discussion focused on the acquisition of stressed accounts by the National Asset Reconstruction Company Ltd (NARCL). Sitharaman directed that efforts to acquire stressed accounts must intensify, emphasizing the importance of regular meetings between NARCL and banks to expedite the onboarding process.
In addition to stressing the need for enhanced deposit mobilization, Nirmala Sitharaman urged PSBs to innovate and offer attractive deposit schemes. This strategy aims to broaden their deposit base, enabling them to extend more credit to support economic growth.
Fraud prevention emerged as a key concern during the deliberations. While acknowledging the improved performance of PSBs, Sitharaman highlighted the critical threat posed by bank frauds. She instructed PSBs to focus on preventing large corporate frauds, wilful defaults, and actions that defraud individual customers.
Sitharaman called for the adoption of advanced fraud prevention and detection mechanisms and emphasized the importance of customer education on safe banking practices. Banks were directed to undertake consumer education measures to protect customers from malicious fraud calls and to ensure timely identification and investigation of accounts involved in fraud.
Addressing the issue of willful defaults, Nirmala Sitharaman instructed PSBs to enhance due diligence before loan disbursement, regularly monitor large loan accounts, and take swift legal action in cases of default. Strict administrative action against bank officials enabling fraud and wilful defaults was also urged.
The meeting delved into cybersecurity issues, with Nirmala Sitharaman emphasizing the need for a system-wide perspective to address vulnerabilities. PSBs were directed to ensure the privacy of customer data and adopt proactive cybersecurity measures to protect sensitive financial information from cyber threats.
Recognizing the evolving digital landscape, Nirmala Sitharaman urged banks to adapt to technological changes while ensuring the integrity of domestic financial systems remains uncompromised. Collaboration and mutual learning among PSBs, and coordination with security agencies, regulatory bodies, and technology experts were highlighted as essential elements in creating a resilient financial ecosystem against potential cyber threats.
