New Delhi, June 13 (IANS) Following a sharp interest rate cut by the Reserve Bank of India (RBI), Finance Minister Nirmala Sitharaman will meet the heads of public sector banks on June 27 to review their financial performance and discuss key government schemes.
This will be the first major review meeting since the RBI’s unexpected move to slash the policy repo rate by 50 basis points to 5.5 per cent and cut the cash reserve ratio (CRR) by 100 basis points to 3 per cent.
The CRR cut will be implemented in phases and is expected to release Rs 2.5 lakh crore into the banking system, boosting liquidity and encouraging lending.
The RBI’s six-member Monetary Policy Committee, headed by Governor Sanjay Malhotra, voted five-to-one in favour of this policy easing.
The rate cuts are aimed at stimulating economic growth, which slipped to a four-year low of 6.5 per cent in FY25.
According to reports, the Finance Minister will use the June 27 meeting to assess the financial health of public sector banks and set new targets for the ongoing financial year.
FM Sitharaman is also expected to urge banks to increase credit flow to productive sectors to support the slowing economy.
The meeting is likely to include a review of key government initiatives such as the Kisan Credit Card scheme, the Pradhan Mantri Mudra Yojana, and three social security programmes — the Pradhan Mantri Jeevan Jyoti Bima Yojana, the Pradhan Mantri Suraksha Bima Yojana, and the Atal Pension Yojana.
The review comes at a time when public sector banks are reporting record profits. In FY25, their combined profit jumped 26 per cent to an all-time high of Rs 1.78 lakh crore, up from Rs 1.41 lakh crore in FY24. All 12 public sector banks posted profits for the year.
State Bank of India (SBI), the country’s largest lender, led the pack with a net profit of Rs 70,901 crore in FY25 — a 16 per cent increase over the previous year.
It alone accounted for over 40 per cent of the total earnings among public sector banks.
–IANS
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