India needs 4-5 more SBI sized banks: FM Nirmala Sitharaman.
Finance Minister Nirmala Sitharaman on Sunday said that India needs much more banks and much more sizable banks, post a smart recovery, to meet the growing needs of the country.
Speaking at the 74th Annual General Meeting of the Indian Banks’ Association in Mumbai, Sitharaman said that in order to meet the growing needs of the industry and also to ensure that all economic centers of the country are covered with at least one There is an urgent need to increase banking. Physical or digital banking presence.
“We need to scale up banking. At least four-five more SBI sized banks are needed,” he said.
After doing two rounds of bank consolidation earlier, the central government decided to merge six disparate and vulnerable PSBs into four in one stroke in 2019.
Accordingly, Punjab National Bank (PNB) acquired Oriental Bank of Commerce and United Bank of India; Allahabad Bank became part of Indian Bank; Canara Bank incorporated Syndicate Bank, and Andhra Bank and Corporation Bank merged with Union Bank of India. Earlier, State Bank of India (SBI) along with its five associate banks, while Vijaya Bank and Dena Bank were merged with Bank of Baroda.
Finance Minister appreciates the efforts of PSBs
Sitharaman appreciated the efforts of PSBs to see that the amalgamation of banks was completed without any inconvenience to the customers during the pandemic period.
She said that in the post-pandemic world, banks will need to change their mindset and the way they conduct their business.
The Finance Minister said that digitization has brought about a paradigm shift in the way business is done and banks now need to think about the future and keep pace with the evolving technology.
Sitharaman also asked IBA to do digital mapping of each district of the country with regard to bank branch operations and their location presence. This, he said, will help address the gaps where there is no banking presence.
The Finance Minister said, “It is not necessary to have a physical banking presence everywhere. The optic fiber network of the country covers two-thirds of the nearly 7.5 lakh panchayats. It can be used to provide banking services even in unconnected areas. Is.”
He also asked banks to develop models and better understanding of export-focused businesses as the country sets a $2 trillion export target by 2030. With regard to funding for the infra sector, he said a Public Sector Development Financial Institution (DFI) is coming up. soon.
Sitharaman said that the Indian economy is in a critical phase of reset and banks will form the backbone for it by providing best financial services.
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