Finance Minister Nirmala Sitharaman on Tuesday urged public sector banks (PSBs) to develop long-term banking relationships with young Indians, and directed the 12 state-run lenders to launch a month-long "Banking for Youth" campaign commencing Oct 2, according to Business-Today. The campaign targets people above 16 years of age, and the directive came in the concluding session of the two-day PSB Conclave in New Delhi.
Sitharaman said banks should adopt a "lifecycle" approach, aiming to become the preferred financial partner across different life stages — 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," Sitharaman said, as reported by Business-Today.
Lifecycle approach across customer segments
Business-Today reported that the Finance Minister applied the "lifecycle" logic beyond youth, stating that institutions must understand customers better and anticipate how their requirements change over time. The transitions she highlighted include:
| Customer type today | Future transition |
|---|---|
| Young student | Employee or entrepreneur |
| Micro enterprise | Small and then medium enterprise |
| Depositor | Investor and wealth-management customer |
"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," Sitharaman said.
Banking for Youth campaign details
The month-long campaign will allow the 12 PSBs to actively reach young people at the start of their financial journey through colleges, universities and skilling institutions, according to Business-Today. The objective is to bring them into the formal banking system and raise awareness around credit scores, bank credit products and government credit schemes. Key campaign features:
- Commences Oct 2
- Open to individuals above 16 years of age
- Run by the 12 state-run lenders
- Outreach through colleges, universities and skilling institutions
"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 added.
Sitharaman also suggested that, to attract youth, banks could complement their banking propositions with lifestyle-linked benefits, including coupons or vouchers for fitness centres, yoga centres and credible mental wellness platforms.
GenZ technology expectations
Recognising the high penetration of technology among GenZ, the Finance Minister noted that young people expect banking to be simple, intuitive, personalised and available around the clock, Business-Today reported.
Public sector banks' GenZ gap
The push 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, according to Business-Today. The government-controlled banks have also lost salary accounts of large private sector companies.
Priority sector lending: beyond numerical targets
Addressing emerging gaps is of essence in priority sector lending (PSL), Sitharaman said, and its success should be assessed not merely by numerical targets, but by whether the credit is "timely, adequate and productive".
The Finance Minister's directives at the PSB Conclave place the 12 state-run lenders on a clear path to compete for young customers at the earliest stage of their financial lives, with a defined campaign, a stated age bracket and a mandated outreach network of educational institutions.
Sources:
