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Key Points:
- The Finance Ministry has directed public sector banks (PSBs) in India to expedite the onboarding of stressed accounts by the National Asset Reconstruction Company (NARCL), improve fraud prevention measures, enhance cybersecurity, and prioritize customer data security.
- The NARCL was established in 2021 with the goal of cleaning up stressed assets in the Indian banking system. However, the company’s progress has been slow due to various factors, including pricing disagreements.
- The Finance Minister also emphasized the importance of mobilizing deposits to PSBs and urged them to offer attractive deposit schemes to enhance their deposit base and extend more credit.
- Sitharaman highlighted the need for advanced fraud prevention and detection mechanisms, as well as educating customers about safe banking practices. She also called for stricter action against conniving officials and emphasized the importance of recovery from accounts declared as fraud or willful default.
- Cybersecurity was another key focus of the meeting, with the Finance Minister urging PSBs to ensure the privacy of customer data and adopt proactive cybersecurity measures.
The Indian Finance Ministry has directed public sector banks (PSBs) to expedite the onboarding of stressed accounts by the National Asset Reconstruction Company (NARCL) and enhance their focus on fraud prevention and cybersecurity measures. Finance Minister Nirmala Sitharaman chaired a meeting with PSBs to review their performance and provided key directions and recommendations. The NARCL, a government-backed bad loan aggregator, was established in 2021 with the aim of cleaning up stressed assets in the Indian banking system. However, the progress of NARCL has been slow due to structural issues and reluctance from lenders. The Finance Minister also emphasized the importance of mobilizing deposits to PSBs and urged them to offer attractive deposit schemes to enhance their deposit base, enabling them to extend more credit. Sitharaman highlighted the need for advanced fraud prevention and detection mechanisms and stressed the importance of educating customers about safe banking practices. She also called for stricter action against conniving officials and emphasized the importance of recovery from accounts declared as fraud or willful default. Cybersecurity was another key focus of the meeting, with Sitharaman urging PSBs to ensure the privacy of customer data and adopt proactive cybersecurity measures. Overall, these directions and recommendations aim to improve the efficiency and security of PSBs in India.
