‘Expand credit, improve quality of PSL’: FM Sitharaman asks PSBs to address priority-sector lending gaps

Finance Minister Nirmala Sitharaman on Tuesday asked public sector banks (PSBs) to keep pace with the expectations of young Indians, who increasingly want banking services to be simple, intuitive, personalised and available round the clock.

Speaking at the PSB Confluence, Sitharaman asked the 12 PSBs to launch a month-long ‘Banking for Youth’ campaign from October 2, 2026, with particular outreach to citizens above 16 years of age.

According to her, "Banks should take the initiative directly to young people rather than wait for them to visit branches. Colleges, universities, skill-building institutions and other campuses could serve as key touchpoints for account opening, financial awareness and direct engagement."

From campus to career

Sitharaman said each PSB should formulate its own strategy based on its product portfolio, regional presence and institutional strengths. The objective, she stressed, should extend beyond opening accounts to establishing relationships that evolve as young customers move through education, employment, entrepreneurship and investment.

“Public Sector Banks must be the first and most trusted choice of young Indians, whether they are opening their first account, receiving their first salary, pursuing higher education, starting an enterprise or making their first investment. You should be a part of their lives,” she said.

The minister also emphasised that the campaign should not remain a one-month exercise. Instead, banks should use it as a starting point for sustained engagement, building relationships “from campus to career and beyond”.

Lifestyle benefits, youth-focused branches

Sitharaman suggested that banks could offer free online learning content in partnership with reputed educational platforms and institutions. They could also supplement their banking propositions with lifestyle-linked benefits, including coupons or vouchers for fitness and yoga centres and credible mental wellness platforms.

At branches, she proposed dedicated youth-focused spaces such as ‘Yuva Kiosks’ or ‘Yuva Banking Mitra’, where designated employees could help young customers navigate financial services and make informed decisions.

Focus on credit awareness

The Finance Minister also called for greater awareness of the formal credit ecosystem, including credit scores, bank credit products and government credit schemes. She said this would help young Indians access finance for future entrepreneurial ventures while developing responsible credit habits.

“Equal emphasis should be given to building awareness of the formal credit ecosystem, including credit scores, various bank credit products, and government credit schemes,” Sitharaman said.

She also suggested that the Indian Banks’ Association (IBA) explore a dedicated web- and mobile-friendly portal for banking awareness among youth. Such a platform could provide information on banking services and financial opportunities while connecting young users with appropriate banking services.