Finance Minister Nirmala Sitharaman emphasized the need for banks to concentrate on their fundamental functions of lending and deposit collection. Speaking to reporters after the post-budget meeting with the Reserve Bank of India’s (RBI) central board, Sitharaman expressed concern about the sluggish pace of deposit growth compared to lending activities. She advocated for banks to balance these activities by revisiting traditional methods and introducing innovative deposit schemes.
Sitharaman highlighted that deposits and lending are interdependent, likening them to the two wheels of a cart. Currently, she noted, deposit growth is lagging behind lending. She plans to review the banking sector’s performance soon, with a focus on the implementation of government schemes and priority-sector lending.
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The RBI has also flagged issues related to the mismatch between deposit and lending rates, especially following the deregulation of interest rates. To address this, RBI Governor Shaktikanta Das announced that banks will soon undertake a new initiative to resolve unclaimed deposits. Last year, a similar effort helped banks address their top ten unclaimed deposit cases by reaching out to the rightful owners. Das reported that the previous drive yielded satisfactory results.
The RBI has launched a dedicated portal, Unclaimed Deposits Gateway to Access Information (UDGAM), allowing users to search and claim unclaimed deposits across multiple banks. The portal aims to streamline the process, reflecting a 26% increase in unclaimed deposits, totaling Rs. 78,213 crore as of March 31, 2024.
Addressing concerns about the political situation in Bangladesh, Sitharaman acknowledged the uncertainty it has created for Indian garment sector investors. She expressed hope for a swift resolution from Bangladesh’s interim government to restore stability for both nations’ economies. Sitharaman noted that the textile industries in Tamil Nadu, which benefit from Bangladesh’s Least Developed Country (LDC) status, are particularly impacted.
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