The Finance Ministry on Tuesday “encouraged” public sector banks to use “responsible” artificial intelligence (AI) and data analytics to improve customer service, and these banks were also told to focus on increasing lending to sectors such as renewable energy, green infrastructure, food processing, tourism and data centres.
At a meeting on Tuesday to review the financial performance of public sector banks for the first half of 2025-26, Financial Services Secretary M. Nagaraju met managing directors and chief executive officers of financial institutions and also discussed the “theme of human-AI convergence in banking”.
“The Secretary stressed that digital banking must remain inclusive and secure, and called on banks to strengthen their cyber resilience, ensure continuity of operations, and improve the quality and timeliness of complaint handling. The responsible adoption of AI and data analytics was encouraged to improve customer service delivery,” a Treasury statement said.
“In line with the government’s Viksit Bharat @2047 vision, PSBs presented their progress under specific champion sectors such as renewable energy, green infrastructure, food processing, tourism and data centres. Banks were encouraged to scale up credit in these sectors, adopt sustainable financing practices and strengthen their preparedness for transition to Expected Credit Loss (ECL) framework through robust models and data-driven provisioning,” the statement added.
India’s 12 public sector banks posted a total net profit of Rs 93,675 crore in the first half of FY26, with loans up 12.3% year-on-year (YoY) and deposits up 9.6% YoY as at end-September. At the same time, the non-performing loan ratio also decreased. At the meeting, Chief Secretary M. Nagaraju asked state-run banks to continue raising low-cost deposits to maintain growth in lending, especially to micro, small and medium enterprises (MSMEs) and agriculture.
He also called on banks to maintain financial discipline, deepen customer-centricity, and be prudent, innovative and inclusive as they transform the country’s banking operations.
At the meeting, the Ministry of Finance also launched a startup financing module on the JanSamarth portal that brings together 14 credit-related government schemes in one online platform. The Startup Common Application Journey has been developed by the Indian Banks Association and PSB Alliance. PSB Alliance is a company set up by all public sector banks to provide important customer-oriented services envisioned by the government, allowing startups to apply for loans, compare offers and track applications simultaneously. You can also access up to Rs 2,000 crore credit across all PSBs under the Startup Credit Guarantee Scheme.
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PAN, GST, tax returns, credit data, etc. are integrated into the platform to speed up loan processing.
“This launch marks a major step towards building a collaborative and technology-driven ecosystem for India’s growing startup sector and reinforces the government’s efforts to empower entrepreneurs in line with the vision of Vikshit Bharat 2047,” the Finance Ministry said separately.
© Indian Express Private Limited
