NEW DELHI: Govt on Friday nudged banks to step up lending in view of healthy balance sheets and the reduction in interest rates by RBI. While reviewing the performance of state-run banks, finance minister Nirmala Sitharaman asked banks to prioritise deposit mobilisation to support credit growth and pushed them to undertake special drives and leverage their massive branch network to raise resources.During bank-wise presentations, the financial services secretary asked the lenders to make use of the clean books to lend, especially to small businesses. The finance minister flagged the energy sector, especially renewables, as a focus and asked banks to develop a credit model to support small modular nuclear reactors. “Deepening corporate lending in productive sectors was also emphasised, with a strong focus on maintaining robust underwriting and risk management standards,” an official statement said.The finance minister also suggested that banks should “proactively identify” emerging commercial growth areas for the next decade, which can aid profitability and growth. The other important message was on improving customer experience, including in branches and simple online and offline platforms. Sitharaman focused on expanding the branch presence, especially expansion in metro and urban centres.The comments come at a time when private lenders have stepped up efforts in urban centres, which are seen to be more profitable. This will mean public sector players will have to double down on effort on this front, while balancing rural and semi-urban focus. In fact, Sitharaman also asked banks to focus on manpower requirements – including existing and arising vacancies – as branches are often not adequately staffed following expansion initiatives. Several banks have already started initiatives on improving customer service and improving the overall branch experience.Banks have been instructed to scale up efforts on financial inclusion schemes and expand their presence in GIFT City. Starting Tuesday, govt is launching a three-month financial inclusion saturation drive.