India needs 4-5 more SBI sized big banks, says FM Sitharaman

Finance Minister Nirmala Sitharaman

India needs a lot more banks and a lot more large sized ones to meet the growing needs of the country needs in the path of making a smart recovery post pandemic disruptions, Finance Minister Nirmala Sitharaman said on Sunday.

Speaking at 74th Annual General Meeting of Indian Banks' Association at Mumbai, Sitharaman said there was an urgent need to scale up banking to meet the growing needs of the industry and also to ensure that all economic centres of the country are covered with at least one physical or digital banking presence.

"We need to scale up banking. The need is for at least four-five more SBI sized banks," she said, while reminding that the amalgamation exercise among public sector banks have helped in moving ahead with creation of large banks.

Having done two rounds of bank consolidation earlier, the Central government in 2019 decided to merge six disparate and weak PSBs into four in one stroke.

Accordingly, Punjab National Bank (PNB) took over Oriental Bank of Commerce and United Bank of India; Allahabad Bank became part of Indian Bank; Canara Bank subsumed Syndicate Bank; and Andhra Bank and Corporation Bank merged with Union Bank of India. Earlier, State Bank of India (SBI) with five of its associate banks while Vijaya Bank and Dena Bank were merged with Bank of Baroda.

Sitharaman lauded the efforts of the PSBs to see through that the amalgamation of banks during the pandemic period was completed without any inconvenience to customers.

She said that that in the post pandemic world, hanks would need to change their mindset and the way they conduct their businesses.

Digitisation, the Finance Minister said has changed a lot of how businesses are done and banks will now need to think futuristically and keep pace with evolving technology.

Sitharaman also asked the IBA to conduct a digitised mapping of each district of the country with regard to presence of bank branch operation and their location. This, she said, would help to plug areas of gaps with no banking presence effectively.

"Not necessary to have physical banking presence everywhere. The country's optic fibre network has covered two-third of about 7.5 lakh panchayats. This could be used to deliver banking services in unconnected areas as well," the Finance Minister said.

She also asked banks to develop models and better understanding of businesses focused on exports as country has set a $2 trillion export target by 2030.

With regard funding for the infra sector, she said that a government sector development financial institution (DFI) is coming up soon.

Sitharaman said that Indian economy is at a critical stage of a reset and banks would form the backbone for it by providing best of the financial services.

--IANS

sn/ksk/

 


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


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