Nirmala Sitharaman Urges Public Sector Banks to Go 'Cool' for Gen Z

Finance Minister Nirmala Sitharaman has asked public sector banks (PSBs) to change their traditional image and become more attractive to Gen Z and young Indians.

Speaking at the concluding session of PSB Confluence 2026, Sitharaman urged state-run banks to focus on customers aged 16 and above and provide banking services that are simple, personalised and available around the clock.

She said public sector banks should understand what younger customers expect and build long-term relationships with them from their first interaction with the banking system.

PSBs asked to offer youth-focused services

Sitharaman suggested that public sector banks introduce services and benefits specifically designed for younger customers.

Banks could partner with reputed educational institutions and online learning platforms to provide free learning and skill-development content. Such initiatives could help banks connect with young people while encouraging greater participation in the formal financial system.

She also proposed lifestyle-related benefits such as discounts, coupons and vouchers for fitness centres, yoga centres and credible mental wellness platforms.

Physical branches could also include dedicated spaces for young customers through facilities such as “Yuva Kiosks” or “Yuva Banking Mitra”.

These dedicated employees or banking facilities could help young customers understand banking products, manage their finances and navigate important stages of their financial journey.

Sitharaman highlights private bank perception

The Finance Minister also pointed to a perception gap between public and private sector banks among younger customers.

She said PSBs are often associated with their traditional “government bank” image, while many young people consider private banks more modern and attractive.

Sitharaman referred to conversations with young people who said they preferred private banks for opening accounts because they viewed them as “cool”.

She urged public sector banks to speak directly with young customers and understand what changes could make their services more appealing.

However, she also stressed that becoming more youth-friendly should not mean compromising the principles and discipline associated with responsible banking.

Banks asked to build relationships from campus to career

Sitharaman said public sector banks should aim to become the first trusted financial institution for young Indians at different stages of their lives.

This could include opening a first bank account, receiving a first salary, funding higher education, starting a business or making a first investment.

Instead of waiting for young customers to visit bank branches, she encouraged PSBs to take their services directly to colleges, universities, skill-development institutions and other campuses.

The approach could include account-opening drives, financial awareness programmes and direct interaction with students and young professionals.

Focus on credit scores and financial awareness

The Finance Minister also called for greater financial education among young people, particularly around the formal credit system.

Banks have been asked to explain credit scores, different types of credit products and government-backed credit schemes that could help young entrepreneurs access financing.

Sitharaman also highlighted the importance of maintaining a healthy credit history and developing responsible borrowing habits early in life.

'Banking for Youth' campaign proposed

Sitharaman proposed that public sector banks consider launching a month-long “Banking for Youth” campaign from October 2, 2026, coinciding with Gandhi Jayanti.

The campaign could be coordinated through the Department of Financial Services and the Indian Banks' Association.

The proposed initiative would focus on young people at the beginning of their financial journey and seek to establish lasting relationships rather than limiting engagement to opening bank accounts.

The broader goal is for public sector banks to connect with young Indians from “campus to career and beyond” while combining modern services and youth-focused benefits with responsible banking practices.