PTI New Delhi

Finance Minister Nirmala Sitharaman on Friday asked public sector banks (PSBs) to take advantage of Reserve Bank's jumbo 50 basis points rate cut to increase lending toward productive sectors of the economy.

During a meeting to review financial performance of PSBs, Sitharaman asked their chiefs to maintain profitability momentum in FY26, sources said. According to sources, the minister expected that PSBs credit growth should improve post 50-bps rate cut by RBI. Banks were also directed to try maintain the FY25 credit growth level or increase during the current financial year.

She also emphasised that banks should also onboard more customers on government's schemes in a bid to increase financial inclusion.

Comprehensive review of various segments and progress in government schemes including Kisan Credit Card, PM Mudra and three social security schemes -- Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana (APY) were done during the meeting.

Besides, the banks were also advised to work on ways to garner more low cost deposits.