Public Sector Banks to Face Critical Review on AI Preparedness and Asset Quality

The Department of Financial Services (DFS) gears up for an all-encompassing review of Public Sector Banks (PSBs) today. Financial Services Secretary M. Nagaraju will helm this high-stakes meeting, converging with the heads of India's government-owned banks.

Signaling the administration's focus areas, Secretary Nagaraju is set to scrutinize the digital readiness of PSBs, emphasizing artificial intelligence and efforts to combat digital fraud. As cybercriminal activities rise, the ministry is expected to demand robust action plans from banks to safeguard depositor interests in digital transactions. The agenda encompasses a broad spectrum of issues vital to the banking sector's health and the government's financial inclusion objectives. Evaluations of financial performance, asset quality of PSBs, and the operations of the National Asset Reconstruction Company Limited (NARCL) will take place.

Bank leaders are poised to deliver updates on non-performing assets (NPAs) and recovery initiatives, which have remained under close observation by the Finance Ministry. Discussions will include efforts via Debt Recovery Tribunals (DRT) and BAANKNET, highlighting the push to resolve stressed assets. The meeting extends to reviewing credit flow to agriculture, the progress of Regional Rural Banks (RRBs), and the Jan Samarth Portal status—the government's platform for credit-linked subsidy schemes. Focus will also be on credit provisions for MSMEs and advancing financial inclusion schemes, underlining the government's aim to ensure widespread banking access. Additionally, the DFS Secretary will unveil a revamped website to boost public engagement and transparency.

(With inputs from agencies.)