Sitharaman says PSU banks must develop distinct areas of excellence
This story was originally published at 19:57 IST on 18 August 2026
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NEW DELHI – Finance Minister Nirmala Sitharaman urged public sector banks to develop unique capabilities and leadership to cater to niche customer needs. "Every bank need not pursue every opportunity in exactly the same manner," she said at a seminar on the banking sector.
The finance minister emphasised that each financial institution should identify its distinctive strength, whether arising from geography, customer relationships, sectoral expertise, technology capabilities, or international presence, and then build on it. "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," Sitharaman said, speaking at PSB Confluence 2026.
Sitharaman said state-owned banks have a vast customer base, an extensive branch network, a presence across geographies, strong institutional experience, and growing digital capabilities. "These trends should translate into stronger competitive positions in businesses and customer segments where our banks have the potential to lead," Sitharaman said.
This comes days after Prime Minister Narendra Modi said that at least one Indian bank should feature among the top five global banks for India to truly become a global economic powerhouse. At the two-day-long 'Manthan' organised by the Department of Financial Services in 2025, the government told banks that the aim is to have at least two globally competent banks by 2047. End
Reported by Sagar Sen and Priyasmita Dutta
Edited by Saji George Titus
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