FM Sitharaman urges banks to boost MSME lending, stronger NBFC-PSB ties

Finance Minister Nirmala Sitharaman on Thursday underlined the critical role of banks in sustaining India’s growth momentum amid global uncertainty, calling for a renewed focus on trust, inclusivity, and customer-centricity.

“The uncertainty in the global environment has only increased. The impact of these uncertainties is faced by multiple countries. India’s resilience stands out,” she said at Bank of Maharashtra’s 91st Foundation Day event in Pune.

She attributed this strength to “strong macroeconomic fundamentals” and a “young demographic,” which have helped India grow at a higher trajectory. “The resilience has grown in this April to June quarter. Our GDP increased to 7.8%,” she highlighted.

The Finance Minister further pointed to global rating upgrades, noting, “Over the last few years, India and its economic advisors have relooked at what the fundamentals are. As a result, you can see the ratings going up. The performance of our banks stands out particularly well.”

She also emphasised the need for a deeper, institutionalized collaboration between NBFCs and PSBs to strengthen the financial ecosystem.

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Endorsing the DFS Secretary’s remarks, she said: “I stand with the DFS Secretary’s advice to concentrate more and lend more to MSMEs.”

M. Nagaraju, Secretary, Department of Financial Services, highlighted that public sector banks (PSBs) have, for the first time this year, overtaken private banks in credit disbursement. “PSBs can now play a bigger role in not only India’s financial growth but also globally,” he said.

He urged PSBs to expand their lending footprint across MSMEs, women entrepreneurs, agriculture, corporates, and education loans, while also taking their businesses abroad to support Indian entrepreneurs. “Retail is good, but it’s not enough for a bank,” Nagaraju added, stressing that customers seeking loans must have a seamless experience.