Nirmala Sitharaman: In light of the current global financial situation brought on by the failure of some foreign banks in the US and Europe, Finance Minister Nirmala Sitharaman assessed the performance of public sector banks (PSBs) on key financial health metrics on Saturday. She advised the banks to frequently conduct stress tests and to be watchful of interest rate risks.
Open discussion of the worldwide situation
A two-hour meeting with the MDs and CEOs of PSBs included an open discussion of the worldwide situation in the wake of the failure of Silicon Valley Bank (SVB) and Signature Bank (SB), as well as the problems that contributed to the Credit Suisse catastrophe. According to a formal statement, prominent officials including Minister of State for Finance Bhagwat Karad, Secretary of Financial Services Vivek Joshi, and others also attended the meeting. She also covered both the short- and long-term perspectives on the current and imminent external global financial hardship. She emphasised during the PSB review meeting that banks should exercise due diligence and abide by the regulatory framework by putting a strong emphasis on risk management and diversifying their deposit and asset bases.
PSBs must carefully examine their business models to spot stress points
According to the statement, the finance minister emphasised that PSBs must carefully examine their business models to spot stress points, such as concentration risks and harmful exposures, and urged them to take advantage of this time to develop comprehensive crisis management and communication plans. The heads of PSBs informed Sitharaman that they uphold regulatory requirements, adhere to best practises in corporate governance, guarantee prudent liquidity management, and continue to put a strong emphasis on asset-liability and risk management.
Increase business presence in cutting-edge fields
The minister emphasised that PSBs must make the most of their branches that have been established in International Financial Services Centers in GIFT City Gujarat in order to find possibilities abroad, including those involving People of Indian Origin (PIOs). The minister urged banks to concentrate on credit outreach in regions of the country where credit offtake is lower than the national average, particularly in the northeast and eastern regions, and to increase business presence in cutting-edge fields like drones, e-NAM, and One District One Product (ODOP).
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