Finance Minister Nirmala Sitharaman on Sunday said that many districts in India lack banking facilities despite witnessing a high level of economic activity, reported PTI.
Addressing the 74th annual meeting of the Indian Banks’ Association, the finance minister asked the lenders to increase their efforts to boost their presence in such areas. She also asked them to ensure that financial transactions are conducted through a digitised framework where there is no physical presence of banks, reported NDTV.
“Through digital mapping of such areas, banks should find out where physical presence is needed and where customers can be served digitally,” Sitharaman said.
The finance minister said that about two-thirds of panchayats have been connected through optic fibre network and banks should also ensure that financial transactions are conducted there through digitisation.
Sitharaman said that following the outbreak of the coronavirus pandemic, Indian lenders have adapted to digitisation faster than many other countries but pointed out that at least four to five banks equivalent to the size of State Bank of India are needed to meet the challenges in the sector.
“We need to scale up banking to meet changing requirements in light of the shifting realities of the economy and industry,” she said.
The finance minister also said that the National Asset Reconstruction Company should not be called a “bad bank” as it is done in the United States.
“It is fine for US to have a ‘bad bank’, and eventually we might do the same thing, but because it is bank driven, we will not call it the same,” she said, reported Mint.
Sitharaman had announced the setting up of the National Asset Reconstruction Company, often proverbially referred to as “bad bank”, on September 16. The move is aimed at acquiring bad loans from banks in the country by making a offer to buy them.