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Informist, Thursday, Sept. 25, 2025
 

--Sitharaman: See oversaturation in bks' retail lending, need focus on MSME

--CONTEXT: Finance Minister Sitharaman speaking at Bank of Maharashtra event 

--Banking secy: Time for PSU banks to play reasonably bigger role globally 

--CONTEXT: Banking Secy Nagaraju speaking at Bank of Maharashtra event 

--Banking secy: PSU banks need to lend more, provide capital to MSME sector 

--Banking secy: PSU banks need to lend more for education 

 

NEW DELHI – There is an oversaturation and overconcentration on retail loans by Indian banks, and some of that focus can be redirected towards advances for micro, small, and medium enterprises, Finance Minister Nirmala Sitharaman said Thursday at Bank of Maharashtra's 91st Foundation Day Event in Pune. Speaking at the same event, Financial Services Secretary M. Nagaraju said banks, particularly public sector banks, must lend more to the MSME sector and provide them with increased working capital.

 

"But banks also should provide more capital to MSMEs both for expansion as well as recovery from the stress they are in," Nagaraju said. "Retail is good, but that is not enough for a bank to grow," he said. "Lend more to corporates, more MSMEs, more agri business, agri-value business, these are the things that are going to keep banks and the country on the path of progress," he said, adding that PSU banks should also increase their loans for education.

 

"All the banks are in good position but to really support the dream of Prime Minister's Viksit Bharat by 2047, all the banks should be very very vigilant about to whom they lend, how they lend, how they assess their risk, how they recover the money they lend, these are the fundamentals of banking I think we should always keep in mind," the banking secretary said. 

 

Nagaraju also said that given the health of the Indian banking industry is in good shape, it is an opportune time to consider the next-level aspirations of public sector banks. With healthy capital and low non-performing asset ratios, PSU banks can now logically and reasonably expect to play a larger role in the global financial sector. "We want our strength of PSU performance should be taken outside India also so that Indian enterprises and industry will be able to set up business there, capture new markets there, and we are able to provide more credit to business houses," he said. 

 

At a two-day banking sector reform event organised earlier in the month, the finance ministry and the banking industry had brainstormed the idea to have at least two globally competent banks by 2047. According to S&P Global Market Intelligence, State Bank of India is the 43rd largest bank by assets in the world. Private sector lender HDFC Bank is the second Indian bank in the top 100 largest banks, ranking 73rd.  End

 

Reported by Priyasmita Dutta

Edited by Saji George Titus

 

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