No More Easy Money For Banks: Sitharaman Slams CASA Lapses, Warns Against Mis-Selling

Finance Minister Nirmala Sitharaman outlined how Indian banks lost access to cheap CASA funds after years of aggressive lending without adequate deposit mobilisation or proper credit checks. She said banks relied excessively on lending, often without asset backing, while failing to strengthen their deposit base. The government, she added, deliberately refused repeated capital infusions, urging banks to become stronger institutions capable of raising funds from markets. Sitharaman also flagged concerns over impersonal banking, flawed credit assessments, and widespread mis-selling of insurance products. Welcoming the RBI’s new guidance, she stressed that mis-selling is unacceptable and must be treated as a serious offence, with customer interest placed firmly at the centre of banking practices.