Mumbai: India needs four or five more banks like SBI, said Union Finance and Corporate Affairs Minister Nirmala Sitharaman. “The way in which the economy is shifting to a different plane altogether, the way in which industry is adapting, so many new challenges keep arising. To address these challenges, we need not just more, but bigger banks,” said Sitharaman. Sitharaman was delivering the keynote address at the 74th Annual General Meeting of the Indian Banks’ Association (IBA) in Mumbai on Sunday, as per a press release.
Sitharaman lauded the contribution of digitized Indian banks in transferring money to people during the Covid pandmeic. “If we look at the post-COVID scenario, India's banking contour will have to be very unique to India, where there has been an extremely successful adoption of digitization. While banks in many countries could not reach out to their clients during the pandemic, the level of digitization of Indian banks helped us to transfer money to small, medium and big account holders through DBT and digital mechanisms,” said Sitharaman.
Sitharaman emphasised the importance of digitisation in the future of Indian banking. She also put forth ideas in bridging disparities in digitization. Sitharaman urged IBA to improve banking access in every district.
“Almost two-thirds of nearly 7.5 lakh panchayats have optical fibre connection, IBA should consider this and conduct an exercise and decide where banks should have a physical presence and where we are able to serve customers even without a physical branch. IBA should take the initiative and complement the government's efforts for financial inclusion and enhancing access to financial services, especially in unserved and under-served areas,” she said. Sitharaman also pointed out the issue of less credit takers in the eastern region.
Regarding UPI, Sitharaman said, “In the payment world today, Indian UPI has actually made a very big impression. A RuPay card which was not as glamorous as a foreign card is now accepted in so many different parts of the world, symbolic of India's futuristic digital payment intentions.”
Appreciating the execution of the amalgamation of banks during the Covid-19 pandemic, Sitharaman said it happened without friction and aberrations.
In an assertive tone, Sitharaman said, the National Asset Reconstruction Company Ltd is not a bad bank.“It is a formulation that is intended to clean up banks' assets and dispose of NPAs in a speedy manner. Banks are now able to raise money from the market, hence the burden on govt. to recapitalize banks will be less, this is how we want banks to function – a lot more professional, with a changed mindset,” said Sitharaman.“Working together, NARCL and India Debt Resolution Company Ltd (IDRCL) would be able to restructure and sell the NPAs,” she said.
While reminding of the setting up of Development Finance Institution, Sitharaman also said that enough provisions are made for DFIs to come up in private sector also. Sitharaman also envisioned good competition between public and private sector DFIs, so that money is available at competitive prices.
During the beginning of the address, Sitharaman paid homage to all members of the banking industry who lost their lives serving the nation through the COVID-19 pandemic.
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