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India needs 4-5 more SBI sized banks: FM
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SME Times News Bureau | 26 Sep, 2021
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.
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