Home / Industry / Banking /  Banks need to create a plan to catalyze India’s growth: FM


Union finance minister Nirmala Sitharaman on Friday urged banks to plan strategies and meet the credit requirements of the economy for the next 25 years. Banks should play the role of a catalyst if India is to grow quickly for the next 25 years, the finance minister said at the 75th annual general meeting of the Indian Banks’ Association.

“We have so much and more to do. The banking industry needs to serve Amrit Kaal. We have to see how best we can lift ourselves to meet the aspirations of a growing India," she said. Sitharaman said the immediate priority of banks should therefore be to detect fraud and unusual transactions, track bad money and alert the government.

“No fraudulent account will be left without being taken to the court. Fraudsters have no place in the country. Banks will not suffer for money taken away by fraudsters. This is the kind of support with which we want to work with banks. I would love to see banks now plan for the Amrit Kaal. Your money is coming back, you have got the opportunity to bring more professionals," said the minister.

Sitharaman said banks need to come up with strategies to meet the aspirations of the youth. “You need to make your portfolios so that they are attractive to the young as well and make yourselves accessible to them. Are you communicating to the youth, to women? Are you offering products to them?".

The minister also underlined the importance of having staff who can speak the local language, considering the diversity of the nation. “Show inclusivity in your staff, in the way you speak to your customers. When you have staff who do not know the regional language and who demand citizens to speak in a particular language, you have a problem. Please review the people getting posted at branches, people who cannot speak the local language should not be assigned to roles dealing with customers. You must have a lot more sensible ways of recruiting people."

Sitharman said banks need to improve insurance coverage and ensure maximum saturation in government schemes such as MUDRA Yojana. She stressed the importance of upgrading Regional Rural Banks. “RRBs need a lot more assistance in digitalization. Sponsoring banks need to give more attention to RRBs, including in bringing them to the Account Aggregator Framework and in disbursal of agricultural credit," she said.

Sitharaman also stressed that while banks are adequately capitalised, they must look at professionalising boards at a faster pace.

“Professionalise your decision-making boards. There is no way banks can any longer run with a crony background. Our government has ensured that there are no instructions given or interference made in the functioning of the banks. We need to take professionalism at a faster pace. We are conscious of the need to let the banks be, and let them run by professionals, with a purely banking perspective in mind," she said.

She urged banks to ensure that their systems speak to each other so that they are able to serve customers better.

Often, customers are forced to transact with multiple lenders due to which it is important that the systems of one bank talks to that of other. She termed such a mechanism as an artificial wall erected by lenders to protect their turf.

She reminded bankers that they will have to prepare themselves to play a bigger role as the country moves to become a developed economy by 2047 when the nation will be completing a century of independence.

With inputs from PTI


Gopika Gopakumar

Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.
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