Banks must focus on core areas, use old ways to collect deposits: FM at RBI meet
Addressing reporters after the customary post-budget meeting with central board of RBI, FM said that she would soon review the performance of banking sector.
New Delhi: Finance minister Nirmala Sitharaman on Saturday asked banks to focus on their “core” areas of lending and deposit activities, expressing concern over slackness in the former, and urged them to strive an equilibrium between the two by adopting “old-fashioned” ways of collecting deposits through innovative and attractive schemes.
She said deposits and lending are the two wheels of a cart, and the deposit is moving slower than lending. Addressing reporters after the customary post-budget meeting with the central board of the Reserve Bank of India (RBI) in New Delhi, the FM said that she would soon review the performance of the banking sector with regard to various issues, including the implementation of government schemes and the priority-sector lending.
Earlier, the central bank also expressed concern over the deposit-lending mismatch in the banking sector and alerted the banks even as the fixing of both lending and deposit interest rates were deregulated.
Speaking on the occasion, RBI Governor Shaktikanta Das said the banks will soon launch a drive to settle the unclaimed deposits. Even last year, a similar drive was launched where each bank branch—depending on the number of unclaimed deposits they had—proactively took steps to settle the top 10 such cases by reaching out to the right person, he said.
The outcome of the drive was satisfactory, Das said. A dedicated portal, Unclaimed Deposits Gateway to Access Information, or ‘UDGAM’, is there for people to check their unclaimed deposits and claim the same. An initiative of the RBI, the portal facilitates the registered users to search unclaimed deposits or accounts across multiple banks at one place in a centralised manner. According to the RBI’s annual report, unclaimed deposits with banks rose 26% on an annual basis to Rs.78,213 crore as of March 31, 2024.
Replying to a specific question on the impact of political developments in Bangladesh on the Indian economy, Sitharaman said it has caused a bit of uncertainty for Indian garment sector investors and hoped that the interim government of the country would bring normalcy “sooner rather than later.”
As Bangladesh enjoys Least Developed Country (LDC) status, exports from the country to major markets help businessmen to avail about 9-10% of duty advantage. The FM said the textile industries, particularly from Tamil Nadu, are invested there.
“It is too early for me to see what kind of impact this situation in Bangladesh will have on our economy. I hope that the interim government will settle things sooner rather than later so that both the people of Bangladesh and India can get back to normalcy,” Sitharaman said.