SVB, Credit Suisse crises: Finance Ministry asks PSU banks to submit report on strategies to avert key risks
Finance Minister Nirmala Sitharaman asks public sector banks to keep a close watch on their businesses' status points, risks, and adverse exposure. She also asks banks to keep track of their trading books to ensure sufficient liquidity amid increasing debt and interest rates
The finance ministry is tightening the screws on public sector banks and has directed them to submit a detailed report in the next two weeks.
The ministry said that in the report, the banks will inform about their strategies to avert key risks.
Also read | FM Sitharaman meets PSBs’ chief, asks to identify stress points amid banking crisis in US, Europe
On Saturday, Finance Minister Nirmala Sitharaman held a performance review meeting with the MDs of public sector banks, in which she directed them to keep a close watch on their businesses' status points, risks, and adverse exposure.
Among other aspects, the finance minister had asked the banks to keep track of their trading books to ensure sufficient liquidity amid increasing debt and interest rates.
The ministry has also asked banks to inform it of their bond portfolios and has directed them to increase the frequency of loans and assets.
Also read | The Tale of Two Crises: From Lehman Brothers fiasco to Credit Suisse collapse
The US banking sector came under a crisis when Silicon Valley Bank and Signature Bank's collapsed early this month.
Just a few days later, the European banking sector was also hit by a similar crisis when Credit Suisse, Switzerland's second-largest bank, also went bankrupt.
Though the Indian banking sector is considered strong because of a strict bank regulator (the Reserve Bank of India) and no liquidity problem.
Historically, there have been no regular banking sector crises in India like in the US and Europe.
The finance ministry doesn't want to leave any stone unturned and wants to tighten the noose on public sector banks.
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08:13 AM IST