NEW DELHI: Finance Minister Nirmala Sitharaman has urged India’s public sector banks to transform their image among young customers, asking them to become more appealing to Gen Z without compromising responsible banking standards. Speaking at the concluding session of PSB Confluence 2026, Sitharaman said state-run banks should focus on customers aged 16 and above with simple, personalised and accessible services. Banking for Youth was also one of the key themes discussed at the two-day government-backed confluence.

Sitharaman highlighted what she described as a perception gap between public and private sector lenders. She said young customers often see private banks as more modern or “cool”, while PSBs continue to be associated with the traditional government-bank image. The Finance Minister asked public sector banks to directly engage with young Indians and understand what they expect from banking services.

She said PSBs should aim to become the preferred financial partner for young people from their first bank account and salary to higher education, entrepreneurship and investments. At the same time, she stressed that efforts to modernise the customer experience should not weaken prudential banking standards.

To attract younger customers, Sitharaman suggested that banks explore partnerships with recognised educational platforms to provide free online learning and skill-development content. She also proposed lifestyle-linked benefits such as vouchers or discounts for fitness centres, yoga facilities and credible mental-wellness platforms.

Another suggestion was to introduce dedicated youth-focused spaces at bank branches through Yuva Kiosks or Yuva Banking Mitras. Dedicated staff could guide young customers through banking products, digital services and financial decisions, helping PSBs build relationships beyond simply opening an account.

The Finance Minister also called on banks to improve financial literacy among young Indians, particularly around credit scores, credit histories, loan products and government-backed credit schemes. Greater awareness of responsible borrowing could help young customers prepare for future education, business ventures and other financial needs.

Sitharaman encouraged PSBs to reach students where they study rather than waiting for them to visit branches. She suggested outreach programmes at colleges, universities and skill-development institutions through financial-awareness sessions, account-opening initiatives and direct engagement.

Sitharaman asked public sector banks to consider launching a month-long Banking for Youth campaign from October 2, 2026. The proposed initiative could be coordinated through the Department of Financial Services and the Indian Banks’ Association, with the objective of building long-term relationships with younger customers.

The wider PSB Confluence 2026 brought together public sector banks and financial institutions to develop actionable strategies across several areas, with Banking for Youth identified as one of its major themes. The government’s focus suggests PSBs are being encouraged to compete more aggressively for a generation that increasingly expects fast digital access, personalised support and services linked to everyday life.