Finance Ministry asks banks to explore fintech partnership, co-lending opportunities

The sources said banks were asked to expedite non-performing assets (NPAs) resolution and focus on the recovery of bad loans

The Finance Ministry has asked public sector banks to explore fintech partnerships and co-lending opportunities to expand their business.

In the recently concluded performance review of PSBs by the Finance Ministry, sources said, lenders were asked to focus on technology and data analytics to push their lending.

The Ministry also urged the heads of the public sector lenders to strengthen IT security systems and cybersecurity to check fraud.

According to the sources, banks were asked to sanction loans for productive sectors to accelerate the revival of the economy facing headwinds, including the Russia-Ukraine war.

As per the RBI's latest data, growth in lending by PSBs has improved significantly to 7.8% in March 2022 from 3.6% a year ago. Some of the PSBs recorded 26% growth.

Bank of Maharashtra (BoM) recorded a 26% increase in gross advances to ₹1,35,240 crore at the end of March 2022. It was followed by the State Bank of India and Union Bank of India with 10.27% and 9.66% growth, respectively.

The Pune-headquartered BoM witnessed a 16.26% deposit growth and mobilised ₹2,02,294 crore at the end of March 2022. Union Bank of India was the second with an 11.99% growth in deposits (₹10,32,102 crore), while Indian Bank recorded a 10% rise to ₹5,84,661 crore.