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The Finance Ministry on Tuesday “encouraged” public sector banks to use ‘responsible’ artificial intelligence (AI) and data analytics to improve customer service, with these lenders also being told to focus on increasing loans to sectors such as renewable energy, green infrastructure, food processing, tourism, and data centres.
“The Secretary emphasised that digital banking must remain inclusive and secure, urging banks to enhance cyber resilience, ensure operational continuity and improve the quality and timeliness of grievance redressal. Adoption of responsible AI and data analytics was encouraged to improve customer service delivery,” a Finance Ministry statement said.
“In alignment with the Government’s vision of Viksit Bharat @2047, PSBs presented progress under identified champion sectors such as renewable energy, green infrastructure, food processing, tourism and data centres. Banks were encouraged to scale up credit in these sectors, adopt sustainable financing practices and enhance preparedness for the transition to the Expected Credit Loss (ECL) framework through robust models and data-driven provisioning,” the statement added.
India’s 12 public sector banks recorded a combined net profit of Rs 93,675 crore in the first half of FY26, with loans up 12.3 per cent year-on-year (y-o-y)and deposits 9.6 per cent y-o-y as at the end of September. At the same time, their bad loan ratios declined. At the meeting, Secretary M Nagaraju called on the state-owned banks to continue raising low-cost deposits and maintaining the growth in loans, particularly for micro, small, and medium enterprises (MSMEs) and agriculture.
The Secretary also urged the banks to remain disciplined financially, deepen customer-centricity, and be prudent, innovative, and inclusive while transforming banking in the country.
At the meeting, the Finance Ministry also launched the start-up loans module on the JanSamarth Portal, which brings together 14 credit-linked government schemes on one online platform. The Startup Common Application Journey is developed by the Indian Banks’ Association and PSB Alliance, a company set up by all public sector banks offering important customer-oriented services envisaged by the government, which lets start-ups to apply for loans, compare offers, and track applications at the same time. They can also access credit across all PSBs of up to Rs 20 crore under the Credit Guarantee Scheme for Startups.
With PAN, GST, tax return, and credit data, among others, integrated into the platform, processing of loans is faster.
“This launch marks a major step towards building a collaborative, technology-driven ecosystem for India’s growing startup sector, reinforcing the government’s commitment to empowering entrepreneurs in alignment with the vision of Viksit Bharat 2047,” the Finance Ministry said separately.
