Sitharaman tells PSBs to shed old image and make banking ‘cool’ for Gen Z

NEW DELHI: Finance Minister Nirmala Sitharaman has urged public sector banks (PSBs) to shed their traditional image and become more appealing to Gen Z, calling on lenders to engage directly with young customers and understand their expectations from banking.

Speaking at the concluding session of the two-day PSB Confluence on Tuesday, Sitharaman said young people increasingly viewed private sector banks as a preferred choice because they were perceived as “cool”. She asked PSBs to understand what drives that perception and identify ways to make banking more engaging for younger customers while retaining the prudential standards expected of financial institutions.

As part of the push, Sitharaman asked PSBs to launch a month-long ‘Banking for Youth’ campaign from October 2 for customers aged 16 and above. The initiative is intended to build relationships with young customers from their college years through their careers rather than treating account opening as a one-time interaction.

The campaign could extend beyond bank branches to colleges, universities, skill-building institutions and other campuses, where banks could conduct account-opening drives, financial awareness programmes and direct engagement with students.

Sitharaman also suggested that PSBs offer free online courses in partnership with established education platforms and institutions. Banks could use learning and skill development initiatives to attract young customers and build longer-term relationships.

The minister proposed adding lifestyle-linked benefits such as coupons and vouchers for fitness, yoga and credible mental wellness platforms.

She also called for more youth-friendly physical banking spaces, suggesting dedicated facilities such as ‘Yuva Kiosks’ or ‘Yuva Banking Mitra’, where employees could help young customers understand and manage their financial needs.

The outreach should also focus on financial literacy, including awareness of credit scores, bank credit products and government-backed credit schemes. Sitharaman said such information could be particularly useful for young people seeking finance to start businesses.

She further suggested that the Indian Banks Association explore a dedicated portal for youth banking awareness, bringing information on financial services and opportunities together in one place.

The finance minister said PSBs should aim to become the first and most trusted banking choice for young Indians, building relationships across key financial milestones including opening a first account, receiving a first salary, pursuing higher education, starting a business and making a first investment.

With India’s young population expected to increasingly influence consumption, savings, investment, entrepreneurship and wealth creation, PSBs are being encouraged to adapt their customer engagement strategies to build stronger relationships with the next generation of banking customers.