Union Finance and Corporate Affairs Minister Nirmala Sitharaman on Sunday said India would need four or five more banks like the SBI to support economic growth.
“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,” she told bankers at the 74th Annual General Meeting of the Indian Banks’ Association (IBA) in Mumbai.
A video of her speech has been released by the Press Information Bureau.
ADVERTISEMENT
Exhorting the banking industry to imagine how banking has to be in the immediate and long-term future, she said, “If we look at post-COVID scenario, India’s banking contour will have to be very unique to India, where there has been an extremely successful adoption of digitisation.”
Underlining the importance of seamless and interconnected digital systems in creating a sustainable future, she said: “The long-term future of Indian banking is going to be largely driven by digitised processes.”
She urged the IBA to improve access to banking in every district through a rationalised approach and optimal utilisation of digital technologies.
ADVERTISEMENT
To achieve this, she advised the IBA to carry out digitised location-wise mapping of all bank branches for every district.
“Almost two-thirds of nearly 7.5 lakh panchayats have optical fibre connection. The 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 physical branch,” she said.
“The IBA should take the initiative and complement government’s efforts for financial inclusion and enhancing access to financial services, especially in unserved and under-served areas.”
Stressing on strengthening the UPI, the FM 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 parts of the world, symbolic of India’s futuristic digital payment intentions.”
“FinTech understands that UPI is its backbone. You have to give it its flesh and blood, you have to strengthen UPI.”
The FM commended the banks for executing amalgamation even during the pandemic, without causing disruption in services to customers.
Lauding the efforts of the IBA for having come together for establishment of the National Asset Reconstruction Company Ltd. and India Debt Resolution Company Ltd. she said the NARCL was not a bad bank.
“It is a formulation which 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 the government to recapitalise banks will be less, this is how we want banks to function — a lot more professional, with a changed mindset.”