India needs more banks to double credit-to-GDP ratio to 100%: RBI official

Topics RBI | Manish Sabharwal | Big banks

Manish Sabharwal, Chairman and co-founder, Teamlease Services

India needs more banks for sustaining high growth and doubling the credit-to-GDP ratio to 100 per cent, RBI board member Manish Sabharwal said on Tuesday.

Sabharwal, who is the chairman of Teamlease Services, also said the country needs immediate reforms in banking, compliance, labour laws and education because "hope is not a strategy".

He was addressing a virtual conference organised by the All India Management Association (AIMA).

India needs to increase its credit-to-GDP ratio from 50 per cent to 100 per cent and it requires more banks, albeit with better regulation, an AIMA statement quoted Sabharwal as saying.

Speaking about economic recovery, he said various sectors are in different stages of improvement.

The FMCG sector is back to 100 per cent, whereas hotel, airlines and construction segments have a long way to go, he said.

Covid-19 has created great business opportunities, but not everybody is in a position to raise funds, he noted.

He pointed out that bank credit, venture capital and private equity funding had slowed down since March but it is a great opportunity for those who are in a position to raise funds to acquire assets.

On the issue of stimulus package, he said it would be "wrong to throw money from the helicopter", and the right thing would be to create a better environment for entrepreneurship through reforms.

"This is a time to build for the next quarter century and not for the next quarter," he said.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel