On a day the Reserve Bank of India Governor Raghuram Rajan underscored some of the steps the country would need to take to achieve 9 per cent growth, Prime Minister Narendra Modi announced that a raft of banking sector reforms were in the pipeline that would boost growth in rural areas in a manner similar to that achieved by the telecom sector some years ago.
Banking in India is all set to become premises-less, paperless and eventually currency-less and this will help curb the black money menace, Mr. Modi announced on Monday at an event in New Delhi to mark the start of IDFC Bank.
The Prime Minister said the world had taken note of how India has been able to stand strong amid the global economic turmoil. His remarks followed news of China’s growth slowing to 6.9 per cent in the third quarter of this year, its worst showing since the 2009 global financial crisis. “From economic point of view, today, world is looking up to India not only with sense of hope but also satisfaction.”
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Separately, global rating agency Standard & Poor’s said it was retaining the sovereign credit rating for India at ‘BBB-’ with stable outlook. It also said that improved policymaking raised prospects for India’s economic and fiscal performance.
Talking about the reforms that have already been initiated, Mr. Modi said the government has plans to infuse Rs.70,000 crore in the public sector banks in the next few years to help them deal with the distressed assets issue. “Bad loans in the past few years are a problem but we can’t only cry about it…We are trying to solve this problem.”
He listed out a seven-point agenda to improve operations of state-owned banks, including re-capitalisation, setting up of the Bank Board Bureau and introduction of a framework for accountability.
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