FM Nirmala Sitharaman exhorts PSBs to meet PSL targets set for micro-enterprises, small farmers

New Delhi, July 7 (KNN) Union Finance Minister Nirmala Sitharaman on Thursday directed public sector banks (PSBs) to ensure that Priority Sector Lending (PSL) targets in the sub-categories should also be met, particularly the small and marginal farmers, and the micro-enterprises.

Chairing the review performance meeting of PSBs, she noted that the overall PSL have exceeded the mandated target. 

The FM asked PSBs to make sure an increase in rural, agriculture and sectoral credit to meet the PSL norms and transparent recognition of non-performing assets (NPAs) as per the extant guidelines of the regulator.

Under the PSL rules, a banking entity needs to lend 40% of the adjusted net bank credit to the so-called priority sector or economically weaker sections such as agriculture, micro-enterprises and other economically disadvantaged sections.

During the meeting attended by the chief of PSBs, it was noted that major financial parameters viz., credit deployment, profitability, asset quality, capital adequacy etc. indicate that performance of PSBs significantly improved.

The asset quality of PSBs has improved significantly with gross NPAs at 4.97% and net NPAs at 1.24% in March 2023. During FY 2022-23, PSBs earned a record aggregate net profit of around Rs 1.05 trillion, almost triple from net profits earned in 2013-14, the ministry said in a statement.

KNN Bureau