The Department of Financial Services (DFS) has laid out a roadmap to make public sector banks (PSBs) more youth-centric, with a focus on financial inclusion, entrepreneurship, employment and digital-first banking. The initiative aims to move PSBs away from a largely product-centric approach towards a more customer journey-led banking ecosystem, particularly for young Indians entering the workforce, starting businesses or seeking access to formal credit.
The DFS has also called for a “catch them young” approach, with banks encouraged to establish long-term relationships with customers from an early stage of their financial lives.
A key objective of the roadmap is to help transform young people currently engaged as casual labourers into entrepreneurs and job creators. The government also aims to increase youth participation in agriculture from 6% to 10%, while raising the share of salaried youth from 25% to 35%.
The roadmap envisages greater coordination between PSBs and youth-focused platforms to provide support across training, entrepreneurship, employment and financial services. The DFS has proposed that PSBs work with My Bharat to develop a roadmap for youth-focused financial inclusion.
Financial literacy and financial discipline have been identified as key gaps among young customers. The DFS has called for financial literacy programmes to be linked with responsible banking behaviour and measurable outcomes, rather than being limited to awareness-building exercises.
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The broader objective is to help young customers develop financial discipline while gaining access to savings, credit, insurance, investment and other financial products as their needs evolve.
According to the roadmap, the existing banking ecosystem remains too product-centric rather than being designed around the financial journey of customers. The DFS has asked PSBs to develop simpler onboarding processes, improve data integration and introduce customised lending models suited to the requirements of young customers.
Banks are also expected to focus on life-stage financial products that can evolve as customers move from education and first employment to entrepreneurship, home ownership and wealth creation.
Digital onboarding will form a key pillar of the strategy. PSBs are expected to strengthen the use of e-KYC, video KYC and straight-through processing to make account opening and access to financial services faster and simpler.
The roadmap also calls for greater use of Account Aggregators to enable consent-based sharing of financial information, including relevant bank and UPI data. This could help banks build a more comprehensive understanding of young customers' financial profiles and potentially improve the delivery of customised credit and other financial products.
The DFS has proposed the creation of youth profiles that can help banks better understand the financial requirements and behaviour of younger customers. Such profiles could support more targeted interventions across financial literacy, training, entrepreneurship and employment, while helping PSBs develop products around specific life stages.
The approach seeks to position public sector banks not merely as providers of individual banking products, but as long-term financial partners for young customers. The youth-focused strategy comes as India's young population increasingly adopts digital payments and online financial services. For PSBs, the challenge will be to convert this digital engagement into deeper, long-term banking relationships.
By combining simplified digital onboarding, consent-based data sharing, customised lending, financial literacy and entrepreneurship support, the DFS aims to build a banking ecosystem that can engage the next generation of customers from an early stage and support them throughout their financial journey.
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