NEW DELHI (CU)_India’s Finance Minister Nirmala Sitharaman on Sunday (26 September), called on banks across the country to expand their branch networks in order to ensure financial inclusion. Participating in 74th Annual General Meeting of the Indian Banks’ Association (IBA), the Minister noted that in the interiors, although high level of economic activities take place, they continue to lack sufficient and banking and financial services.
“Even today many panchayats [village councils] don’t have a bank branch. I am not saying that you need to have a physical presence everywhere, digitisation has saved a lot of costs without compromising the service banks provide,” she told the banking industry lobby group.
The Minister noted that it is up to the IBA and the banks to determine if they need to be physically present in each of these regions or if it is sufficient to provide digital services. “A good rationalised approach will help the government’s financial inclusion agenda,” she added.
Emphasising the digital transformation that is currently being encountered by the banking sector, Sitharaman requested the IBA to map banking presence in each districts in order to identify any gaps that are prevalent.
During the meeting, the Finance Minister also discussed the establishment of National Asset Reconstruction Company, adding that clean bank books are assisting the government as the recapitalisation requirements go down. “The burden on government will be far lesser as your books will be cleaner,” she said.
Another key subject which was discussed by the Minister was the mega consolidation exercise, which was announced in 2019 and implemented in April 2020. The process involved the creation of Punjab National Bank, Canara Bank, Union Bank of India and the Indian Bank. Appreciating the efforts of bankers in smoothly carrying out this process amidst the pandemic, Sitharaman noted that the driving force behind the amalgamation was to build scale.
“We need to scale up banking to meet the new changing and growing requirements but that was thought of even before the pandemic. Now, all the more reason why we would need four or five more SBIs [State Bank of India] in this country,” she said.
