Conduct deposit mobilization drives, FM tells state-run banks

Finance minister Nirmala Sitharaman on Monday urged state-run banks to conduct special drives to raise deposits, and quickly implement budget measures aimed to improve credit access for small businesses and individuals.
Sitharaman told public sector bank chiefs at a performance review meeting that credit growth has picked up, but mobilization of deposits could further be improved to fund the credit growth sustainably, an official statement issued after the meeting said.
The meeting was also attended by Vivek Joshi, secretary in the department of financial services and Nagaraju, secretary-designate.
Sitharaman told the bank chiefs that the government has always tried to facilitate credit access to citizens at the bottom of the pyramid to support their livelihood and improve lives. She asked the banks to expeditiously implement the budget announcements, including a new credit assessment model for small businesses based on their digital footprints and cash flows.
Banks were also told to focus on further increasing credit flow to eligible beneficiaries under initiatives like PM Surya Ghar Muft Bijli Yojana—a free electricity scheme and PM Vishwakarma Yojana, a skill development programme.
The Union budget for FY25 proposed a new assessment model for small businesses. Under this, public sector banks will build their in-house capability to assess micro, small and medium enterprises for credit, instead of relying on external assessment.
They will also take the lead in developing a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy. In the budget, Sitharaman also announced doubling the limit of Mudra loans to ₹20 lakh from ₹10 lakh for entrepreneurs who have availed and successfully repaid previous loans.
The finance minister told banks to ensure compliance with the RBI’s guidelines on handing over security documents to customers after closure of loans without any delay.