New Delhi [India], December 30 (ANI): Union Finance Minister Nirmala Sitharaman chaired a meeting on Saturday to review the performance of Public Sector Banks (PSBs) on various parameters, informed a press release.

The progress on the acquisition of accounts by the National Asset Reconstruction Company Ltd (NARCL) was also deliberated.

Sitharaman directed that the acquisition of stressed accounts by NARCL needs to improve further, and necessary efforts must be made in this direction. It was advised that NARCL and banks should hold regular meetings to expedite the onboarding of stressed accounts.

In addition to the above measures, the Finance Minister emphasized the importance of mobilizing deposits, urging public sector banks to innovate and offer attractive deposit schemes to enhance their deposit base, which will also enable them to extend more credit.

During deliberations on fraud-related matters, Sitharaman expressed satisfaction at the improved performance of the public sector banks. She also said that bank frauds pose a critical threat to the security of both individual customers and the financial institutions themselves, which can lead to financial losses and reduced public trust in the banking system, according to the release.

The meeting was also attended by Union Minister of State for Finance Bhagwat Kishanrao Karad; Vivek Joshi, Secretary, Department of Financial Services; Heads of Public Sector Banks besides senior officials of the Department of Financial Services.

Sitharaman asked banks to concentrate fraud prevention activities on both large corporate frauds and wilful defaults as well as on actions that defraud individual customers. She also instructed to adopt advanced fraud prevention and detection mechanisms and ensure that the customers are further educated about safe banking practices.

According to the release, the banks were directed by the Union Finance Minister to undertake consumer education measures for protection from malicious fraud calls. Banks were also directed to make efforts for timely identification of accounts as fraud and their subsequent investigation.

Banks were also advised to put more effort into recovery from accounts declared as fraud and willful default. She asked banks to monitor the early warning signals to check potential frauds.

Recognizing that the effectiveness of legal action against defaulters before courts and tribunals largely depends on effective representation by lawyers and attorneys assisted by bank officials, the Finance Minister called for a performance review of counsel representing public sector banks to ensure better legal outcomes.

Union Finance Minister stated that the willful defaults not only strain the banks’ financial health but also hamper the flow of credit in the economy. The Minister urged the public sector banks (PSBs) to adopt responsible lending practices across the board.

She further instructed the PSBs to enhance due diligence before loan disbursement, ensure regular monitoring of large loan accounts, and undertake swift and thorough legal action in cases of such default. Union Finance Minister also exhorted the banks to take strict administrative action against the conniving officials of the banks who enable fraud and wilful defaults, the release stated.

The issues related to cyber security were also deliberated in the meeting. The preparedness of all the PSBs in addressing cyber security risks was reviewed by the Union Finance Minister. Banks were directed to ensure complete privacy of customer data.

She stated that issues of cyber security should be seen from a system perspective as a small vulnerability can be used by nefarious elements to create system-wide risks.

The Finance Minister noted the need to adopt proactive cybersecurity measures and implement stringent security protocols to protect sensitive financial information and systems from cyber-attacks. She exhorted the banks to adapt to the evolving digital landscape, ensuring that the integrity of domestic financial systems remains uncompromised.

Sitharaman also emphasized the importance of collaboration and mutual learning among the PSBs and coordination between banks, security agencies, regulatory bodies and technology experts to create a more resilient financial ecosystem against potential cyber-security threats, the release stated. (ANI)