Sitharaman urges PSBs to enhance deposit growth

NEW DELHI: The slow growth in bank deposits again came up for discussion as finance minister Nirmala Sitharaman raised the issue with the chief of public sector banks (PSBs) during a review meeting in New Delhi on Monday. During the meeting, she emphasised the importance of boosting their deposit growth.

As per banking sources, the FM urged bank leaders to focus on core banking operations and enhance deposit by launching innovative products. During the meeting, Sitharaman evaluated the banks’ financial performance and the advancement of key government initiatives such as PM Awas Yojana, PM Surya Ghar, and PM Vishwakarma Yojana. She also examined deposit growth, the credit-to-deposit (CD) ratio, and asset quality.

Earlier this month, she had highlighted a discrepancy between the growth rates of deposits and lending. She had noted that lending growth is outpacing deposit growth. She mentioned the August 19 meet to urge banks to boost deposit collection, besides addressing other issues. Meanwhile, she said the RBI has granted banks flexibility concerning interest rates and encouraged them to leverage this flexibility to make deposit options more appealing.