Union Finance Minister Nirmala Sitharaman on Saturday urged banks to focus on core banking, including mobilising deposits and credits.
She said deposits and lending are two wheels of a cart and "the deposit is moving slowly". She made the remarks during a press conference following a meeting with the Reserve Bank of India's Central Board of Directors in Delhi on Saturday.
The minister said banks should bring innovative and attactive products and raise deposits in order to overcome the mistmatch with credit growth
RBI Governor Shaktikanta Das, who joined the press meet with Sitharaman, said that interest rates on deposits and loans are deregulated and hence banks are free to decide the rates.
During the Monetary Policy Committee's announcement, Das had said that alternative investment avenues have become more attactive to retail customers compared to bank deposits, adding that this could potentially expose the banking system to structural liquidity issues.
Das then urged banks to focus more on mobilisation of household financial savings by leveraging fully on their vast branch network.