Jaitley reviews annual financial performance of Public Sector Banks, Financial Institutions

The Finance Minister was speaking at the Annual Performance Review Meeting of the PSBs and Financial Institutions (FIs) here.

The CMDs of banks, both PSBs and private banks basically expressed that until the cost of funds or deposits for the banks, as reflected in the re-pricing of their liability book at the new rate comes down, and liquidity levels at the new lower costs are tested, full transmission would not be viable.

However, all banks unanimously expressed that in a period of 2-3 months, greater transmission of lower rates could be seen.

The Annual Review Meeting of the Union Finance Minister with the CEOs of Banks (including private banks), Insurance Companies and Financial Institutions (FIs) for the year ending Mar 31 was held here  in the national capital.

Jaitley chaired the meeting which was attended by the Minister of State for Finance, Jayant Sinha, Secretary (Financial Services), Hasmukh Adhia, Chief Economic Adviser (CEA), Arvind Subramanian, Deputy Governor, RBI  SS Mundra among others .

Jaitley also expressed his concern over the modest growth of domestic credit of 7% over the previous year registered by the Public Sector Banks (PSBs) and took stock of the sectoral profile of the total domestic credit flow of Rs. 49.01 lakh crore during 2014-15.

The agricultural credit grew by 17.33% over the previous year, which came as a silver lining.

The Finance Minister urged the bankers to achieve the target of 20% growth in educational loan asset by the Department of Financial Services (DFS), Ministry of Finance and also attempt to even out the huge regional disparity in such loans. 

Jaitley noted the good growth at 16 – 18% in the Housing sector, and also strongly advised the PSBs to achieve a 30% growth in Priority Sector housing loans, which are intrinsically secure loans and which are required to provide a stimulus to overall growth.

While reflecting on the success of the Pradhan Mantri Jan Dhan Yojana(PMJDY), the Finance Minister expressed happiness over the manner in which the social security mission “From Jan Dhan to Jan Suraksha” achieved huge success.

Launched by Prime Minister Narendra Modi May 9 in Kolkata, the three Social Security Schemes in the Insurance and Pension sectors namely the Pradhan Mantri Suraksha Bima Yojana (PMSBY), the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Atal Pension Yojana (APY),  garnered large scale subscriptions. 

It was appreciated that 2.53 crore people subscribed to PMJJBY and 7.57 crore people to PMSBY as on June 10.

Around 2.12 lakh people joined APY between May 9 to June 10.

Jaitley cautioned both the banks and the Insurance companies that a robust claim settlement process should be put in place so that the claimants get their benefits speedily in case of any mishap.

He urged the insurance companies to carry out widespread awareness generation campaigns in this regard to sensitise the people on claim procedures.

During his discussion with CEOs of private sector banks, the Jaitley shared his concern over the low participation of private banks in government promoted schemes, especially the three social security schemes where private bank participation is only 4 %. 

He reiterated that national priorities ought to be common to private banks as well since they benefit from the same framework as PSBs.