FinMin to review flagship schemes with PSB chiefs ahead of Budget

Weeks prior to the Union Budget for the financial year 2025-26, M. Nagaraju, Secretary of the Department of Financial Services, will chair a meeting on January 15 with the Managing Directors and Chief Executive Officers of public sector banks. The meeting aims to review the progress of various financial inclusion schemes and discuss future funding requirements in light of the upcoming Budget, according to sources.

 

“The meeting will focus on evaluating the implementation of key government initiatives under the DFS. Additionally, it is expected to address other financial inclusion issues and discuss the funding needs for these schemes,” said the source.  

 

The source further indicated that the government may consider providing assistance and additional funding for programs such as the Pradhan Mantri Jan Dhan Yojana, Stand Up India Scheme, Atal Pension Yojana, Mudra Yojana, and Pradhan Mantri Suraksha Bima Yojana.

 

The meeting is expected to be attended by Chairman of Indian Banking Association, Chairman & Managing Director of SIDBI, CEO of Mudra LTD., CEO of National Credit Guarantee Trustee Company Limited (NCGTC) Ltd and senior director of National Informatics Centre too will be present in the meeting, added source.

 

"A few bankers have expressed the need to discuss pending issues related to fixed deposit taxation in the upcoming meeting. Given that this meeting takes place just before the budget, we consider it to be crucial," stated a public sector banker who requested to remain anonymous.

 

Separately, DFS secretary is also meeting the Micro finance institutions (MFIs) today on January 8.

 

"We will urge the government to establish a dedicated funding window and a robust credit guarantee mechanism in the upcoming Union Budget, as access to capital remains a significant challenge for mid-sized and small MFIs. The rising cost of borrowing is becoming increasingly burdensome. By creating a dedicated fund for MFIs, or implementing a credit guarantee system, we can empower these institutions to secure necessary financing from banks and other financial entities,” said an MFI executive who will be attending the meeting.

 

Launched on August 28, 2014, the Pradhan Mantri Jan Dhan Yojana (PMJDY) aims to ensure comprehensive financial inclusion across India by providing every household access to banking services. The scheme offers basic bank accounts with no minimum balance, free RuPay debit cards that come with Rs 2 lakh accident insurance, and overdraft facilities of up to Rs 10,000. As of November 20, 2024, PMJDY has registered an impressive 54.03 crore accounts with total deposits of Rs 2.4 trillion, including 30.07 crore accounts (55.7 per cent) held by women and 35.95 crore accounts (66.6 per cent) located in rural and semi-urban areas, alongside 36.92 crore RuPay cards issued. Complementing this, the Pradhan Mantri Suraksha Bima Yojana (PMSBY) offers a one-year personal accident insurance scheme for individuals aged 18 to 70, providing a death benefit of Rs 2 lakh and Rs 1 lakh for permanent and partial disabilities, with an annual premium of just Rs 20. As of the same date, PMSBY has seen a cumulative enrolment of 47.59 crore, with 1,93,964 claims received and 1,47,641 claims disbursed, totaling Rs 2,931.88 crore in benefits. Furthermore, the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) has enrolled 21.67 crore individuals, with 8,93,277 claims received and 8,60,575 successfully disbursed, amounting to Rs 17,211.50 crore in benefits, underscoring its impact on life insurance coverage. Additionally, the MUDRA scheme has sanctioned 50.31 crore accounts, with a sanctioned amount of Rs 31.28 trillion, of which Rs 30.55 trillion has been disbursed. Lastly, the Stand-Up India scheme has sanctioned 2.52 lakh accounts, with 76 per cent of these accounts opened by women entrepreneurs, reflecting a commitment to fostering entrepreneurship and financial inclusion among underrepresented groups.