Union Finance Minister Pranab Mukherjee on Saturday stressed the need for banks to play a key role in promoting inclusive growth.
“Financial inclusion is close to my heart …It is a necessary condition for financial deepening, which will help us address the basic issue of growth with equity,” said Mr. Mukherjee while speaking at the inauguration of the 6th International Conference on Banking and Finance, organised by the Indian Merchants' Chamber and the Institute of Chartered Accountants of India, here.
The Finance Minister informed that the government and the Reserve Bank of India had taken a number of initiatives for furthering financial inclusion.
He said the ‘Financial Inclusion Fund' for meeting the cost of developmental and promotional interventions had been set up with NABARD.
The government was furthering the process of financial inclusion through Swabhiman (aimed at providing basic banking services in remote areas), Swawalamban (a pension scheme for people working in the unorganised sector), Aam Admi Bima Yojana (providing insurance cover for the poor) and MGNREGA, he said.
Mr. Mukherjee asserted that the nationalisation of banks was a path-breaking step in deploying financial services for the transformation of the economy. “Our objectives are somewhat different from those of the developed economies. We need to indigenously develop a workable business model and an integrated delivery model geared to promote financial inclusion, and in turn, sustainable economic growth,” he said.
He also said financial stability had become an integral part of policy planning across the world, in the post-crisis period.
The greatest challenge now was to evolve circumstances to maintain the growth momentum. The Finance Minister said several measures had been suggested to enhance the resilience of the global financial system to support the development path. These included enhancing transparency, strengthening risk management frameworks, refining regulatory mechanism, among others.
Mr. Mukherjee further noted that the Financial Stability Report for December, 2011, brought out by the RBI showed that the domestic financial system remained robust.
The government was committed to ensure the requisite level of capitalisation of public sector banks (PSBs).
The Finance Minister, however, cautioned that if GDP growth slowed down, there could be some downstream impact on the asset quality of banks.
