New Delhi: Finance Minister Nirmala Sitharaman on Saturday asked banks to focus on their “core areas” of lending and deposit-taking. She expressed concern over weakness in lending and deposit-taking and urged them to strive for a balance between the two by replacing “old-fashioned” methods of collecting deposits with innovative and attractive schemes.
She said deposits and loans are the two wheels of the same cart and deposits are moving slower than loans. Addressing reporters after the usual post-Budget meeting with the Reserve Bank of India (RBI) central board in New Delhi, the finance minister said she would soon review the performance of the banking sector on various issues, including implementation of government schemes and lending to the priority sector.
Previously, the central bank had also expressed concern about the imbalance between deposits and lending in the banking sector and warned banks, even though the setting of lending and deposit interest rates had already been deregulated.
Speaking on the occasion, RBI Governor Shaktikanta Das said the banks would soon launch a campaign to clear the unclaimed deposits. A similar campaign was launched last year where each bank branch – depending on the number of unclaimed deposits – took proactive steps to clear the top 10 such cases by contacting the right people, he said.
The result of the drive was satisfactory, Das said. A special portal, Unclaimed Deposits Gateway to Access Information or ‘UDGAM’, is available for people to check their unclaimed deposits and claim them. The portal is an initiative of the RBI and allows registered users to centrally search for unclaimed deposits or accounts in multiple banks at one place. According to the RBI’s annual report, unclaimed deposits in banks increased by 26% year-on-year to Rs 78,213 crore as on March 31, 2024.
Responding to a specific question on the impact of political developments in Bangladesh on the Indian economy, Sitharaman said they had created some uncertainty among investors in the Indian garment sector and hoped that the country’s caretaker government would restore normality “sooner rather than later”.
Since Bangladesh enjoys the status of a least developed country (LDC), businessmen can get tariff benefits of 9 to 10 percent by exporting from the country to major markets. The Finance Minister said that the textile industry, especially from Tamil Nadu, is investing there.
“It is too early for me to judge what impact this situation in Bangladesh will have on our economy. I hope that the caretaker government will sort things out sooner rather than later so that both the people of Bangladesh and India can return to normalcy,” Sitharaman said.
