Nirmala Sitharaman says youth don’t find public sector banks ‘cool’, offers advice

“Pardon me if I say with some liberty, because I take the blame as much as all of you, public sector banks still give the impression of a government bank,” Sitharaman said, adding that in her interactions with youngsters under the age of 25, not one named a PSB in which they had an account.

Nirmala Sitharaman calls on public sector banks to be ‘cool’ and prudent

“In my curiosity, I said, ‘Wow, all of you seem to have private sector in your mind. Why?’ They were very hesitant to say public sector banks…it’s not ‘cool’. Their expression was this. I need public sector banks not to be ‘not cool’. Please get some young people to talk to you all, what makes you appear cool or at least one portion of your banks, when they sit in front of the customers, make sure everything is ‘cool’.”

At the same time, Sitharaman cautioned this was not a recommendation from her to PSBs to “go and do something to make you all appear ‘cool’ but not bank enough”. Saying that she did not want to trivialise the issue, the Finance Minister said banking is “serious business” and a balance had to be struck. “But somewhere, private banks seem to have that picture of being banks but cool enough as well,” she said.

Organised by the finance ministry’s Department of Financial Services, the two-day PSB Confluence meeting saw discussions across seven themes relevant to the next phase of growth of the banking and financial sector. After deposit mobilisation, banking for youth, supporting the investment cycle, and global capability centres were discussed on Monday, the focus on Tuesday was on agriculture and horticulture value chain infrastructure, priority sector lending, and reimagining the credit card business.

In her closing remarks, Sitharaman said engaging with the youth early is an important responsibility and a significant opportunity for banks. Towards this, she said PSBs should launch a month-long ‘Banking for Youth’ campaign from October 2 to actively reach young people at the start of their financial journey, bring them into the formal banking system, and “establish an early, meaningful connection”.

Highlighting the importance of colleges, universities, and skill-building institutions as touchpoints for the campaign, Sitharaman said dedicated youth banking spaces such as ‘Yuva Kiosks’ or Yuva Banking Mitra could also be created at physical bank branches, where a dedicated employee could help the youth navigate their financial journey. This should include building awareness of the formal credit ecosystem, including credit scores, various bank credit products, government credit schemes, and sensitising youngsters about the importance of maintaining good credit scores and history for responsible credit discipline.

“So, public sector banks must be the first and the most trusted choice of young Indians. Either they are opening their first account, receiving their first salary, pursuing higher education, and starting an enterprise or making their first investment – you should be a part of their lives,” the Finance Minister said.