Finance Minister exhorts banks to focus on core business, explore new ways to attract deposits
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Finance Minister Nirmala Sitharaman has exhorted banks to focus on their core business and explore new ways to attract deposits, as household savings are increasingly shifting towards alternate investment products. She said both RBI and the government have been asking banks to focus on their business activity and they should be aggressive in deposit mobilisation and then lend. That is the core activity of banks.
Stressing that banks should give emphasis on collecting deposits, Sitharaman said RBI has given them some liberty in managing the interest rates. She said using that liberty, they should make deposits attractive, bring innovative products and mobilise deposits. She also urged bankers to shun lazy banking and focus on small savers rather than big or bulk deposits.
The minister said ‘trickles (small savings) are going to be your bread and butter, money to bank on… that trickle which was the emphasis long back, which kept nothing for the other side (big deposits). Now we’ve (banks) gone to the other side completely. Now they are chasing bulk deposits to meet their targets’.
