NEW DELHI: Urging public sector banks (PSBs) to develop a long-term banking relationship with the youth, finance minister Nirmala Sitharaman Tuesday said they should adopt a “lifecycle” approach and aim to become the preferred financial partner across different life stages of an individual — from campus to career and beyond.“Somebody who enters the bank as a young person… you have to build a relationship for his entire life. So, you have to have products, which are going to be given to them at different stages in their lives so that the individual thinks that for every banking solution… I have a bank already. It shouldn’t be that the (bank) is good for home loans, but it’s not good otherwise,” said Sitharaman as she asked the 12 state-run lenders to launch a dedicated month-long “Banking for Youth” campaign, commencing Oct 2, for people above 16 years of age .
Finance minister Nirmala Sitharaman asks public sector banks to become the first and most trusted banking choice for young Indians.
In the concluding session of the two-day PSB Conclave, Sitharaman said this would allow the banks to actively reach young people at the start of their financial journey through colleges, universities, skilling institutions and bring them into the formal banking system and raise awareness around issues like credit scores, bank credit products and govt credit schemes.“A banking relationship established between ages 16 and 18 can deepen over decades as a young person moves through education, employment, entrepreneurship, home ownership, investment and wealth creation. PSBs must be the first and most trusted choice of young Indians,” she said.Recognising the high penetration of technology among GenZ, Sitharaman noted that young people expect banking to be simple, intuitive, personalised and available around the clock. “To attract youth, banks could also complement their banking propositions with lifestyle-linked benefits. including coupons/vouchers for fitness centres, yoga centres and credible mental wellness platforms,” she said.The pitch comes at a time when public sector lenders have failed to make a significant dent among the younger population, which has preferred more nimble private players. Besides, the govt-controlled banks have lost salary accounts of large private sector companies.Besides, FM also highlighted that the “lifecycle” approach should be applicable to other customers as well, which would require institutions to understand customers better and anticipate how their requirements will change over time.“A young student becomes an employee or entrepreneur. A micro enterprise can grow into a small and then a medium enterprise. A depositor can become an investor and a wealth-management customer. Banks should be able to accompany customers through these transitions,” she said. The minister also noted that addressing emerging gaps is of essence in the priority sector lending (PSL) and its success should be assessed not merely by numerical targets, but by whether the credit is “timely, adequate and productive”.