Finance Minister Nirmala Sitharaman Holds Annual Review Meeting with Public Sector Banks: Key Focus on Deposit Growth, Loan Recovery, and Cybersecurity
June 27, 2025 — New Delhi
Finance Minister Nirmala Sitharaman convened a pivotal high-level annual review meeting with the heads of Public Sector Banks (PSBs) on Friday, June 27, 2025. The gathering aimed to evaluate the financial performance of PSBs for fiscal year 2024-25 (FY25) and discuss strategic priorities including deposit growth, loan recovery, credit allocation to productive sectors, and strengthening cybersecurity frameworks within banks.
Attendees and Background
The meeting was attended by Union Minister of State for Finance Pankaj Chaudhary, the Secretary of the Department of Financial Services (DFS), as well as the Managing Directors and Chief Executive Officers of all 12 PSBs. This was the first such review meeting following the Reserve Bank of India’s (RBI) recent monetary policy decisions, which included an unexpected jumbo 50 basis points reduction in the policy repo rate and a significant cut in the cash reserve ratio (CRR).
On June 6, the RBI’s six-member Monetary Policy Committee, led by Governor Sanjay Malhotra, cut the benchmark repo rate from 6.0% to 5.5%. Additionally, the CRR was reduced by 100 basis points in phases, from 4% to 3%, injecting approximately ₹2.5 lakh crore of additional liquidity into the banking system to spur credit availability and support the slowing economy.
Financial Performance Highlights and Agenda
PSBs posted a record cumulative profit of ₹1.78 lakh crore in FY25, marking a 26% year-on-year growth from ₹1.41 lakh crore in FY24. This represented an absolute profit increase of about ₹37,100 crore. State Bank of India (SBI), the largest player among PSBs, contributed over 40% of this total with a net profit of ₹70,901 crore — a 16% increase from the previous year’s ₹61,077 crore.
Punjab National Bank recorded the highest net profit growth percentage at 102%, reaching ₹16,630 crore, while Punjab & Sind Bank reported a 71% increase in profits to ₹1,016 crore. All PSBs showed profit growth in the last fiscal year, underlining improved asset quality and operational efficiency.
Key Discussion Points
The Finance Minister is expected to have underscored the critical importance of enhancing credit flow to productive sectors of the economy, an essential step to arrest the economic growth slowdown which hit a four-year low of 6.5% in FY25. Encouraging PSBs to amplify credit disbursal to sunrise sectors — such as technology, green energy, and infrastructure — and to invest in digital infrastructure development was a priority on the agenda.
Efficient loan recovery measures were also part of the discussions, aimed at improving asset quality further and ensuring a healthy balance sheet for banks. Given the rising cases of cyber threats globally and increasing digital transactions, cybersecurity enhancements within PSBs were deliberated to safeguard customer data and maintain operational integrity.
Further, the progress of government-backed financial inclusion schemes was reviewed. These included the performance of flagship programs like the Kisan Credit Card (KCC), Pradhan Mantri Mudra Yojana (PMMY), and social security schemes under the Jan Suraksha initiative — namely, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), and Atal Pension Yojana (APY).
Government’s Expectations and Future Outlook
Sources close to the meeting informed that Finance Minister Sitharaman urged public sector lenders to play a catalytic role in accelerating economic growth through increased credit penetration, especially targeting sectors with high employment potential and value addition. Strengthening digital banking infrastructure to enhance accessibility and operational efficiency was emphasized to support India’s digital economy ambitions.
This review meeting comes at an important juncture as the Indian economy faces challenges of moderating growth, inflationary pressures, and global uncertainties. The government’s focus on mobilizing PSB resources to drive inclusive growth, enhance credit flow, and maintain financial stability aligns with broader economic objectives to sustain momentum towards a robust recovery.
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With inputs from ET Now and PTI.