Banking secretary says PSBs must plan appropriate, timely capital raise

Public sector banks must plan for appropriate and timely capital raise as well as strive to reduce intermediation cost to make banking products and services, particularly credit related, affordable to the public, said M Nagaraju, secretary of department of financial services told bankers at the 77^th annual general meeting of Indian Banks’ Association (IBA).

“Each bank needs to identify its focus on building capacity and planning roadmaps for appropriate and timely capital raising or efficient allocation of resources besides striving to bring down intermediation costs,” Nagaraju said.

Speaking at the same event, State Bank of India chairman C.S. Setty, said as new and unfamiliar industries emerge, banks must develop expertise to assess these evolving business models and lending risks.


“Robust risk management, fraud prevention, and culture of innovation will be key pillars in this journey. As we move forward, our focus must be on operational efficiency, cutting tech, and customer centric solutions that redefine banking experiences,” he said.

Nagaraju also said that banks need to collaborate on business and efficiency gains due to inherent similarities among them on multiple matters. Some of these initiatives could be in the areas such as cyber security, technological platforms for risk management, introducing and strengthening applications of artificial intelligence (AI), fintech incubation, acceleration and cloud services.

“The synergy arising out of these will be able to nurture them individually while raising their position as a group in improving the services,” he said.

Speaking on Enhanced Access and Service Excellence (EASE) reforms agenda, a finance ministry’s initiative, Nagaraju said that state-owned banks need to look more towards instituting reforms at every level to involve each employee and develop greater understanding of the expected outcome through these reforms.

The journey of reforms in banks has been a long-term systematic plan of government, and the improvements are now visible through availability of adequate capital buffers, all-time high net worth, net profit, improved asset quality, and improved governance and risk management practises, he said.