The finance ministry on Saturday asked public-sector banks (PSBs) to further deepen the government’s financial inclusion initiatives and work on next-generation reforms, as it reviewed their performance in executing several official schemes, sources told FE.
In a meeting with chiefs of various PSBs, financial services secretary Sanjay Malhotra asked lenders to provide inputs on ways to further bolster the performance of key schemes, including the Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana .
Similarly, progress under credit-linked programs, such as the Rs 5-trillion Emergency Credit Line Guarantee Scheme, Pradhan Mantri Mudra Yojana, Stand Up India Scheme and PM SVANidhi schme for street vendors came up for discussions.
The secretary also took stock of banks’ preparedness in ensuring the setting up of 75 digital banking units in the country, as announced in the Budget for FY23, one of the sources said. Growing digital transactions were discussed in the meeting, with focus on potential steps to make them more lucrative.
The meeting was part of the government’s two-day deliberations with PSBs to not just review their financial performance and future strategies but also come out with ideas to introduce next-generation reforms in various financial inclusion schemes.
On Friday, the finance ministry asked state-run banks to further bolster their balance sheets and raise capital from markets, thus, reducing their reliance on government capital.
The financial services secretary had expressed optimism that the lenders, having registered good profitability in the first three quarters of FY22, would continue to perform well on relevant metrics in the coming years. It will enable the PSBs to boost lending and satiate the credit appetite of a fast-recuperating economy.
Several financial inclusion schemes have performed better than expected despite the pandemic blues. Although the disbursement of Mudra loans–meant for small and budding entrepreneurs—has somewhat slowed in the past two years, it still remained well above the annual average of Rs 2.66 trillion until FY20. In FY21, Mudra loan disbursement stood at `3.12 trillion and until March 11 this fiscal, it touched Rs 2.79 trillion.
From 38.3 crore until FY20, the number of Jan Dhan accounts went up to 44.9 crore until March 9 and covered every unbanked household.
The cumulative enrolment under the Pradhan Mantri Jeevan Jyoti Bima Yojana, a universal social security system for the poor, jumped from 6.96 crore as of March 2020 to 10.27 crore until March 2021 and 12.13 crore as of January 26, 2022.
Similarly, the Pradhan Mantri Suraksha Bima Yojana, a scheme that provides cover for death/disability due to accident, saw enrollment rising from 18.54 crore as of March 2020 to 23.26 crore until March 2021 and 27.26 crore by January 26, 2022.
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