Banks should 'deeply involve' those under ambit of formal financial system: Prez Kovind

Speaking at the golden jubilee celebration of the National Institute of Bank Management, President Ram Nath Kovind said that banks should 'deeply involve' those under ambit of formal financial system. He said that the progress of the nation depends on the contribution of the collective economic strength of the poor.

Pune (Maharashtra):Applauding banks for their efforts to bring in large unbanked population of the country into the formal financial system, President Ram Nath Kovind on Wednesday said that the challenge now is to "deeply involve" those who have been brought into the fold.

Speaking at the golden jubilee celebration of the National Institute of Bank Management (NIBM), he said that the progress of the nation depends on the contribution of the collective economic strength of the poor and urged banks to not leave any citizen behind.

"The challenge before us is to deeply involve those included. I would urge all of you to think of financial products which meet the needs of those at the bottom of the ladder," Kovind said.

The best way for a bank to gain market depth and de-risk its operations is by bringing more people into the ambit of formal financial system, he said.

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"Deep involvement of those at the bottom of ladder requires display of empathy and compassion by Bankers. This needs greater engagement on part of banks with our underprivileged population and attitudinal change towards them," he said.

The president also asked banks to take proactive measures to bring greater gender parity in ownership of financial assets.

Stating that banks are fulcrum of our economic system, he said they have played a sterling role in fuelling the country's economic growth.

Kovind said, as the country aims to become a USD 5 trillion economy, the banking sector has to start preparing for the next big leap.

This mainly involves "banking with the unbanked" and "securing the unsecured", he added.

Kovind said that the regulatory oversight of the RBI has also brought greater stability to banking operations.

"I have learnt that recently role of Reserve Bank of India as regulator has been enhanced. We trust that this will deter malpractices and make our financial systems more credible," he said.

The president said given the growing size of our economy, the country should aim to have more than just one name in the world's top 100 banks.

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He said schemes such as Mudra and stand-up India are channelling funds to aspirational entrepreneurs.

"I will request all bankers to keep a keen eye and not let a good idea die for lack of funding," he said.

Kovind said the recent proposal of the government to enhance deposit insurance coverage from Rs 1 lakh to Rs 5 lakh is a positive step in the direction of assuring savers.

Speaking on the occasion, RBI governor Shaktikanta Das said that the central bank continues to focus on strengthening the overall ecosystem of our banking and financial sector.

He said that the banking sector has benefitted a great deal with the absorption of technology but to manage change effectively and to continue improving the banking services through operational and strategic excellence, banks also have to ensure that change management is integrated into their strategic and operational domains.

PTI report