Sitharaman reviews performance of PSBs; ‘Remain vigilant about the interest rate risks’

New Delhi, Mar 25 (Agency) Union Finance Minister Nirmala Sitharaman chaired a meeting on Saturday to review the performance of public sector banks (PSBs) on various financial health parameters, and the resilience of PSBs in light of the current global financial scenario emanating from the failure of some international banks in the USA and Europe. During the review meeting, an open discussion was held with the MDs and CEOs of PSBs on the global scenario comprising of the failure of the Silicon Valley Bank (SVB) and the Signature Bank (SB) along with issues leading to the crisis in Credit Suisse, an official statement said. Sitharaman reviewed the exposure of PSBs to this developing and immediate external global financial stress from both the short and the long-term perspectives.

During the PSB review meeting, the Finance Minister emphasized on preparedness along with due diligence through adherence to the regulatory framework by focusing on risk management, diversification of deposits and assets base. She underlined that PSBs must look at business models closely to identify stress points, including concentration risks and adverse exposures. Sitharaman also exhorted PSBs to use this opportunity to frame detailed crisis management and communication strategies. The Finance Minister advised PSBs to remain vigilant about the interest rate risks and regularly undertake stress tests. Sitharaman also highlighted that PSBs must leverage the full potential of branches opened in International Financial Services Centres in GIFT City Gujarat to identify international opportunities, including prospects related to Persons of Indian Origin (PIOs), the statement added.