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Sitharaman wants banks to focus on younger customers in next gen push

Finance minister Nirmala Sitharaman has asked banks to develop a focussed approach targeting the young next generation customers and provide wholesome banking solutions to such clientele.

This comes as the government looks to push its flagship schemes such as Mudra Yojana and Start Up and Stand Up India to generate employment through entrepreneurship. Banks are now expected to conduct open house interactions and share their feedback with the government.

“The suggestions were made in an interaction during the review of the progress of banks and the benefits accrued to customers by way of EASE (Enhanced Access and Service Excellence) reforms over the last four years,” said an official aware of the matter, adding that it was pointed out to banks that they should understand the needs and expectations of such clients.

This year’s EASENext reforms for state-run lenders will focus on digital lending, integrated and inclusive banking, with emphasis on supporting small businesses and agriculture.

“It was further suggested that for a reality check, banks should conduct a third-party survey, based upon customer-focused initiatives undertaken so far under EASE by engaging a market research agency or a reputed institute,” the official added.

Earlier this month, minister of state for finance Bhagwat Karad in reply to a question in Rajya Sabha had said lenders have so far extended more than 76.6 million loans amounting to ₹6.12 lakh crore to new entrepreneurs/accounts under the Mudra Yojana. “Around ₹10 lakh crore has been sanctioned to 16.67 crore (166.7 million) accounts under the Pradhan Mantri Mudra Yojana in the last three fiscal years,” he had said.

A senior bank executive said the government wants banks to put in place a collaborative mechanism in order to further push credit growth. “While interest rates may go up on account of a tight monetary policy, the government is keen that those seeking loans should have access and face minimal hassle to secure funding,” he added. In the last six years, banks have sanctioned more than ₹30,160 crore to over 133,000 accounts under the Stand Up India scheme.

Earlier this year, during PSB Manthan 2022, banks were asked to set up a three-year roadmap to improve their performance and competitiveness. Banks will focus on both geography-specific opportunities such as economic corridors and business sector-specific opportunities such as green energy.

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