The Finance Ministry has called on public sector banks to embrace “responsible” artificial intelligence (AI) and advanced data analytics to enhance customer service. Lenders are also encouraged to focus lending on vital sectors including renewable energy, green infrastructure, food processing, tourism, and data centers.

Focus on Financial Performance

During a recent meeting to evaluate the financial performance of public sector banks in the first half of the 2025-26 fiscal year, Financial Services Secretary M. Nagaraju engaged with managing directors and CEOs to discuss the integration of human intelligence and AI within the banking sector, a theme aimed at improving service delivery and operational efficiency.

Emphasis on Digital Banking Security

According to a statement from the Ministry of Finance, Secretary Nagaraju stressed the importance of maintaining inclusive and secure digital banking services. He urged banks to enhance their cyber resilience, ensure operational stability, and improve the handling of customer complaints through timely interventions.

Advancing Sustainable Financing

The government remains focused on achieving its vision of a “Viksit Bharat” by 2047, encouraging banks to demonstrate progress in champion sectors. The proposed expansion of credit in areas like renewable energy and green infrastructure supports sustainable financing practices, better positioning banks to transition to the expected credit loss framework.

Strong Financial Results from Public Sector Banks

India’s twelve public sector banks reported a robust cumulative net profit of ₹93,675 crore during the first half of FY26. Loans increased by 12.3% year-on-year, and deposits rose by 9.6% as of late September. Additionally, the reduction in bad debt rates reflects improved financial health in the sector.

Launch of Startup Loans Module

In a move to support entrepreneurs, the Ministry of Finance introduced the Startup Loans module on the JanSamarth portal, consolidating 14 government credit schemes into a single platform. This initiative allows startups to apply for loans, compare offers, and track applications, facilitating easier access to credit up to ₹20 crore under the Startup Credit Guarantee Scheme.

Fostering Innovation and Customer Focus

During the meeting, Secretary Nagaraju also emphasized the need for banks to uphold financial discipline, prioritize customer-centric approaches, and innovate responsibly. The integration of PAN, GST, tax returns, and credit data within the loan processing system will further expedite the borrowing experience for startups, reinforcing the Ministry’s commitment to creating a supportive ecosystem for the burgeoning startup sector.