Finance Minister Nirmala Sitharaman urges PSBs to sharpen youth outreach, build ahead of demand

Finance Minister Nirmala Sitharaman urged public sector banks (PSBs) to develop strategies to attract young customers, leveraging their strengths in regional presence, product offerings, and expertise. She emphasized the need for PSBs to identify and capitalize on their unique advantages in geography, customer relationships, sector knowledge, technology, or global reach.

Sitharaman highlighted that PSBs are in a strong position and should proactively build capabilities ahead of demand to maintain their leading role in India's economic growth.

At the conclusion of the two-day PSB Confluence, Sitharaman proposed a month-long "Banking for Youth" campaign starting October 2, aimed at establishing long-term relationships with young customers aged 16 and above. The campaign's primary goal is to foster a sustained connection with young customers, enabling banks to cater to their evolving financial needs throughout education, employment, entrepreneurship, investment, and wealth creation.

Sitharaman pointed out the shortfall in priority sector lending (PSL) and urged banks to adopt a more robust approach to addressing this issue. She stressed the importance of ensuring timely, adequate, and productive credit for farmers, micro, small, and medium enterprises (MSMEs), MUDRA beneficiaries, weaker sections, and disadvantaged communities. For Sitharaman, PSL success should be measured not only by numerical targets but also by the timely, adequate, and productive nature of the credit provided.

To broaden their reach and ensure that institutional credit benefits the intended beneficiaries, banks must tailor credit strategies to local agricultural conditions, considering factors such as crops, climate, water availability, and production conditions. Sitharaman emphasized that a one-size-fits-all approach is inadequate and that credit products should reflect the specific needs of each region.