Finance Minister Nirmala Sitharaman has said that the country needs at least four banks equivalent to the size of State Bank of India (SBI) to meet the fast changing requirements of the economy, especially with increasing digitisation.
Addressing the 74th annual general meeting of the Indian Banks' Association, Ms Sitharaman said on Sunday that in the post-Coronavirus world, Indian banks have managed to adapt to the digitised system faster than many nations, at the same time though, “at least four SBI sized banks are required to meet the present and future challenges in the banking system. We need to scale up banking to meet changing requirements in light of the shifting realities of the economy and industry”.
She underlined the need to whole heartedly adapt to the digital infrastructure, observing that Indian banks will require new technologies and their contour will have to be very unique to India.
Highlighting the fact that despite witnessing hectic economic activities, several rural areas still lack banking facilities, efforts should be made to not only ensure physical presence of banks' branches in such areas, but it should be ensured that wherever there are no physical branches of banks, financial transactions are conducted through a digitised framework.
“Through digital mapping of such areas, banks should find out where physical presence is needed and where customers can be served digitally,” the finance minister said during her 30-minutes address.
She said now that around two-thirds of panchayats have been connected through the optic fibre network, banks should reach out to them and ensure their financial inclusion through digitisation.
Praising the association for ensuring that amalgamation of banks went off smoothly even during the raging Coronavirus pandemic, Ms Sitharaman said, “you saw to it that the customers did not suffer during the amalgamation process. You have managed to take forward government's agenda and ensured that it turned out to be a successful exercise. And it happened without any disruption, friction and inconvenience to customers.”