Boosting Financial Growth: CASA Deposits and MSME Lending in Focus

The finance ministry has called upon banks to focus on improving their Current Account Savings Account (CASA) deposits and to boost lending towards micro, small, and medium enterprises (MSMEs) and the agriculture sector. This comes amid concerns over public sector banks' declining CASA ratios affecting net interest margins.

During the 'PSB Manthan' event organized by the Department of Financial Services, top officials, including the State Bank of India Chairman and Punjab National Bank's CEO, discussed strategies to address these issues. The largest lender, SBI, along with Bank of Baroda, reported a slight decrease in their CASA ratios, highlighting a need for corrective measures.

Emphasis was placed on enhancing credit flow to key sectors such as agriculture, which remains crucial to the Indian economy, employing nearly half of the population. Efforts to ensure financial security and open credit channels for farmers were noted as priorities, with significant growth in institutional credit disbursement observed over the past decade.

(With inputs from agencies.)