Finance Minister Urges Banks to Boost Deposit Growth Amidst Credit Boom

Finance Minister Nirmala Sitharaman held a review meeting with public sector bank heads to address the slower growth in deposits compared to credit. She urged banks to introduce innovative products and leverage interest rate freedom to attract more deposits. Issues like cyber security and flagship scheme progress were also discussed.

Finance Minister Nirmala Sitharaman conducted a review meeting on Monday with leaders of public sector banks, urging them to enhance their deposit growth rates.

With deposits growing 300-400 basis points slower than credit over recent months, the minister emphasized the need to avoid an asset-liability mismatch. She reviewed the financial performance, progress of government schemes, and discussed core banking operations.

Sitharaman encouraged banks to utilize the interest rate flexibility granted by the RBI to make deposits more appealing, noting similar sentiments from RBI Governor Shaktikanta Das. The meeting also covered cyber security, risk management, fraud issues, and developments in the National Asset Reconstruction Company Ltd (NARCL).