She tells IBA to improve access to banking through rational approach and optimum use of digital technologies
Union Finance and Corporate Affairs Minister Nirmala Sitharaman on Sunday said India will need four or five more banks like SBI to support economic growth.
“The way the economy is shifting to a completely different plane from the way the industry is adapting, so many new challenges keep emerging. To address these challenges, we need not only more, but bigger banks,” he told bankers at the 74th Annual General Meeting of the Indian Banks’ Association (IBA) in Mumbai.
A video of his speech has been released by the Press Information Bureau.
Encouraging the banking industry to envision what banking should be like in the immediate and long-term future, he said, “If we look at the post-COVID scenario, India’s banking contour will be very unique to India, where One has been the very successful adoption of digitization.”
Underlining the importance of seamless and interconnected digital systems in creating a sustainable future, he said: “The long-term future of Indian banking is going to be largely driven by digital processes.”
He urged IBA to improve access to banking in every district through rational approach and optimum use of digital technologies.
To achieve this, he advised IBA to do digital location-wise mapping of all bank branches for each district.
“About two-thirds of the 7.5 lakh panchayats have optical fiber connection. IBA should consider this and do an exercise and decide where banks should have physical presence and we are able to serve customers even without physical branch,” she said.
“The IBA should take the initiative and complement the government’s efforts to increase financial inclusion and access to financial services, especially in the underserved and underserved sectors.”
Emphasizing on strengthening UPI, the FM said: “In the world of payments today, Indian UPI has indeed made a huge impact. A RuPay card that was not as glamorous as the foreign card is now accepted in many parts of the world, symbolizing India’s intention of futuristic digital payments.
“Fintech understands that UPI is its backbone. You have to give it its flesh and blood, you have to strengthen UPI.”
The FM appreciated the banks for carrying out the amalgamation even during the pandemic, without causing disruption in services to the customers.
Appreciating the efforts of IBA for coming together to set up National Asset Reconstruction Company Limited and India Debt Resolution Company Limited, he said that NARCL is not a bad bank.
“It is a formulation which aims to clear the assets of banks and settle NPAs in a speedy manner. Banks are now able to raise money from the market. So the burden of recapitalization of banks on the government will be less, we want banks to operate in this way – much more professional with a changed mindset.”
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