Concerned over instances of corruption in public sector banks, Finance Minister Arun Jaitley, on Thursday, said the government was taking steps to professionalise the management and help them strengthen their risk management system.
“Professionalising the management of banks, we have taken some decisions in this regard. We expect banks to have better risk management. The Department of Financial Services has been actively working in this regard,” Mr. Jaitley said at a function, organised by Indian Bank here.
Without specifying the names of banks, the Finance Minister said “some recent incidences have been disturbing. I only hope that they are drop in the ocean. We have all learnt the lessons from such incidents, and there will be no repetition of them.”
His statement assumes significance in the light of scams in the state-owned banks.
The Finance Minister, however, expressed hope that an enhanced level of professionalism would further strengthen and improve credibility of the banking system.
“Credibility is of extreme importance as far as the banking system is concerned. We must endeavour improved standards of credibility,” he added.
Lauding the robustness of the financial system, Mr. Jaitley said Indian banking conventionally had been professional and conservative.
When global banking suffered a setback few years ago, the Indian banking system survived the sub-prime crisis, he said, adding that “we have our own sense of banking values, and it is these sense of banking values which have paid well.”
Talking about the financial inclusion initiative of the government, he said: “On August 28, we will launch the flagship programme of the government, the Jan Dhan Yojana, where the Prime Minister will be inaugurating in Delhi and we expect the national participation.’’
The financially excluded population would immensely benefit from this, the Finance Minister said.
“On the very first day (of launch) itself, we want to make a big impact so that it starts with the mode of mission campaign,” he said.
The Finance Minister also said the government accorded high importance to re-capitalisation of public sector banks.
“While maintaining the public sector character, the surplus liquidity (government equity) is to be offloaded, and the entire capital that you (banks) so earn is ploughed back in the banking industry for purposes of expansion,” he said.
