Sitharaman Calls On Public Sector Banks To Translate Strength Into Competitiveness And Leadership

Public Sector Banks (PSBs) have demonstrated their ability to transform, and the next phase should be about converting this institutional strength into greater ambition, competitiveness and leadership, Finance Minister Nirmala Sitharaman said on Tuesday.

"Our Banks and Financial Institutions should help shape, finance and enable the vision of Viksit Bharat," she said in her concluding remark at the two-day PSB Confluence here.

PSBs today have advantages that few institutions can replicate: a vast customer base, extensive branch network, presence across geographies, strong institutional experience and growing digital capabilities, she said.

These strengths should translate into stronger competitive positions in businesses and customer segments where PSBs have the potential to lead, she said.

At the same time, every bank need not pursue every opportunity in exactly the same manner, she said, adding that each institution should identify its distinctive strengths, whether arising from geography, customer relationships, sectoral expertise, technology capabilities or international presence, and build upon them.

"Our public sector banks should therefore be strong collectively while also developing distinct areas of excellence and leadership individually. This will create a strong and more competitive public sector banking system as a whole," she said.

Stressing that state-owned banks have a vast customer base, an extensive branch network, a presence across geographies, strong institutional experience, and growing digital capabilities, she said, "these trends should translate into stronger competitive positions in businesses and customer segments where our banks have the potential to lead." She also noted that public sector banks today are operating from a position of considerable strength and the task is to use that strength with greater ambition to identify opportunities early, to build capabilities ahead of demand, and also to ensure that institutions remain at the forefront of India's next phase of economic growth.

Her remarks come days after Prime Minister Narendra Modi said that at least one Indian bank should feature among the top five global banks as India is progressing towards a developed nation.

The PSB Confluence brought together approximately 125 participants, including Chairmen, Managing Directors and Executive Directors of public sector banks and PFIs, such as NABARD, EXIM Bank, SIDBI, NHB, IIFCL, IFCI and NaBFID, alongside senior officials from the Indian Banks' Association and the Department of Financial Services.

The discussions are structured around seven key themes -- deposit mobilisation, banking for youth, supporting the investment cycle, supporting global capability centres, agriculture and horticulture value-chain infrastructure, re-imagining the credit card business and priority sector lending, it said.