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Informist, Monday, Feb. 23, 2026

 

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--Sitharaman: No roadmap for PSU banks' consolidation as of now 
--Will take up mis-selling by banks at next FSDC meeting 
--No discussion between regulators on mis-selling by banks 
--Bks spending more time selling insurance, less on core function 
--Bks must go out and raise cheap deposits 
--CASA ratio still not top priority of banks 
--Have asked banks to check mis-selling 
--Banks must focus on their core business 
--RBI Malhotra: Bks very well positioned to meet credit needs of econ 
--Deposit growth rate now up due to increase in credit growth 
--Indian banks are adequately capitalised 
--Banks, NBFCs adequately capitalised to push credit growth

 

NEW DELHI – Finance Minister Nirmala Sitharaman Monday said that the government does not have any roadmap for mergers of certain public sector banks. However, the committee proposed in the Budget for 2026-27 (Apr-Mar) will look into the topic, she said. "I'm not familiar with any roadmap...there isn't one," Sitharaman said in a press conference after the board meeting of the Reserve Bank of India.

 

"Bank consolidation was not a subject here, nor was it a subject before the Budget, but the Committee which is now being appointed, once the terms of reference are given they will look into every aspect of how to strengthen Indian banking," she said.

 

In the Budget, Sitharaman proposed setting up a "high level committee on banking for Viksit Bharat" to comprehensively review India's banking sector and align it with the country's growth goals while safeguarding financial stability, inclusion, and consumer protection. "The Indian banking sector today is characterised by strong balance sheets, historic highs in profitability, improved asset quality and coverage exceeding 98% of villages in the country," Sitharaman had said.

 

Speaking at the conference, she raised concern over the growing cases of mis-selling of financial products by banks. She said banks have been spending more time on selling products like insurance where it is not required, instead of focussing on core business.

 

"I've said this several times to the banks...banks need to focus on understanding the customer needs. Today, what is happening is that banks have understood that the government is not giving capital, so they have improved their system. Equally, there was the story of mis-selling happening," she said.

 

"They have reached a point...where they did not have the comfort of the current account and savings account money. But (they) went on lending without asset backing," Sitharaman said. She said for some banks maintaining high CASA ratio has not been top priority and they have been instructed to mobilise deposits.

 

She said there has been no discussion between regulators on mis-selling by banks so far, but it will be taken up at the next Financial Stability and Development Council meeting.

 

Commenting on the banking sector, RBI Governor Sanjay Malhotra said banks are adequately capitalised and can sustain credit growth for the next 4-5 years, which will further support the economic needs. He said deposit growth rate is now keeping pace with the increase in credit growth.  End

 

Reported by Aaryan Khanna and Sagar Sen

Edited by Ashish Shirke

 

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