FM reviews preparedness of PSBs amid stress in banking sector in US, Europe

New Delhi: Union Minister for Finance and Corporate Affairs Nirmala Sitharaman chaired a meeting 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.

The meeting was also attended by Union Minister of State for Finance Dr Bhagwat Kishanrao Karad; Department of Financial Services (DFS) Secretary Dr Vivek Joshi and Managing Directors & CEOs of Public Sector Banks.

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. 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.

The Finance Minister 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 MD & CEOs of the PSBs apprised the Finance Minister that they follow best corporate governance practices, adhere to regulatory norms, ensure prudent liquidity management and continue to focus on having robust asset-liability and risk management. Further, Sitharaman was also informed by the PSBs that they are vigilant of developments in the global banking sector and are taking all possible steps to safeguard themselves from any potential financial shock. All the major financial parameters indicate stable and resilient PSBs with robust financial health.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)