The Finance Minister highlighted the need to identify the “stress points including concentration risks and adverse exposures”.
FM reviews PSBs’ performance: Finance Minister Nirmala Sitharaman on Saturday reviewed the performance of public sector banks (PSBs) amid the ongoing banking crisis in the United States and Europe. The meeting was attended by Union Minister of State for Finance Bhagwat Kishanrao Karad; Secretary, Department of Financial Services (DFS) Vivek Joshi; and MDs and CEOs of PSBs. The Finance Minister highlighted the need to identify the “stress points including concentration risks and adverse exposures”. Sitharaman also emphasised that now is the time to frame detailed crisis management and communication strategies.
The meeting was attended by the MDs and CEOs of all the public sector banks in the wake of the collapse of the Silicon Valley Bank and Signature Bank 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.
The minister also advised the banks to be vigilant at this time and constantly monitor the interest rate risks and regularly undertake stress tests.
Sitharaman also said that PSBs “must leverage the full potential of branches opened in International Financial Services Centres in GIFT City (Gujarat International Finance Tec-City) Gujarat to identify international opportunities, including prospects related to Persons of Indian Origin (PIOs)”.
The MDs and CEOs of the PSBs assured the Finance Minister that they follow the “best” practices and that they adhere to the standard norms, ensure prudent liquidity management and continue to focus on having robust asset-liability and risk management. The top leadership of these banks also assured the FM that they are keeping a close watch on global affairs and the ongoing crisis in the US and Europe and they are well prepared for any situation. All the major financial parameters indicate “stable and resilient PSBs with robust financial health,” they assured the Finance Minister.
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