Finance Minister Nirmala Sitharaman. Photo: The Federal
Nirmala Sitharaman hails private banks' role in nation building as City Union Bank turns 120
Speaking at CUB's 120th anniversary celebrations, she said strong and well-capitalised banks with near-record low NPAs mean cheaper, steadier credit for households, MSMEs, and infrastructure
Finance Minister Nirmala Sitharaman on Tuesday (September 2) said private sector lenders are "vital partners" in the country’s economic growth, highlighting the sector’s strong balance sheets and record-low bad loans.
Speaking at City Union Bank’s 120th anniversary celebrations in Chennai on Tuesday, Sitharaman said scheduled commercial banks’ gross non-performing assets fell to 2.3 per cent as of March 2025, while net NPAs dropped to 0.5 per cent — the lowest in decades.
"Strong and well-capitalised banks with near-record low NPAs mean cheaper, steadier credit for households, MSMEs, and infrastructure," she said.
India’s macroeconomic performance
The finance minister flagged India’s improving macroeconomic performance, noting that the first-quarter GDP grew 7.8 per cent, inflation eased to an eight-year low of 1.55 per cent in July, and the sovereign rating was upgraded by S&P Global Ratings for the first time in 18 years. She added that the fiscal deficit is expected to narrow to 4.4 per cent of GDP this year, down from 9.2 per cent after the pandemic.
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Sitharaman also underlined the achievements of the Jan Dhan financial inclusion scheme, which now covers more than 560 million accounts with deposits worth ₹2.68 trillion.
“A bank account is not just a passport to savings, but a passport to opportunity,” she said.
CUB: Consistent history of profits
City Union Bank, headquartered in Tamil Nadu, has reported profits every year since inception in 1904 and avoided a single year of losses, Sitharaman noted. The lender’s loan book as of March 2025 was heavily tilted toward MSMEs (41 per cent), agriculture (17 per cent), and industries such as textiles, metals, food processing, and engineering.
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The bank was recently ranked second among private lenders for digital payments performance at the Ministry of Finance’s Digital Payments Awards.
