Chief Economic Advisor KV Subramanian said on Sunday that India needs more global-sized banks for the country to become a $5 trillion economy by 2024-’25, PTI reported. He rued the fact that India has only one bank – the State Bank of India – in the top 100 global bank list. SBI is placed at number 55 on the list.

On the other hand, China has 18 banks on the list, and the United States has 12.

“India is the fifth largest economy in the world,” Subramanian said. “So, if the Indian banking sector was proportional to the size of its economy, India should have been where South Korea is, which has six banks in the global top hundred. But in contrast, India has only one bank in the global top hundred.”

Small countries like Finland, Denmark, Belgium, Austria and Norway each have one bank in the top 100, Subramanian said while delivering a lecture at the fifth anniversary event of Bandhan Bank. “If you take countries like Sweden and Singapore, Sweden is one-sixth the size of the economy, Singapore is one-eighth the size of the economy, they have three banks in the global top hundred,” he said.

The chief economic advisor said that like cricketer Mahendra Singh Dhoni, who has shown India how to win abroad, Indian banks too need to scale up to global standards. He said the Indian banking sector must “conquer the world”. “So, the basic point I’m trying to make here is that now in order for India to become a $5 trillion economy, the banking sector needs to be proportional at least proportional to the size of its economy, if not bigger than the proportionality,” Subramanian said.

The chief economic advisor also said India needs more banks. He gave the example of the United States, which has a fourth of India’s population but 20 times more banks. More banks will enhance competition in the banking sector and reduce the cost of funds for the consumers, he said.

Subramanian said India must also focus more on data analytics, artificial intelligence and machine learning, as technology can catch wilful defaulters and play a key role in both scale and quality of lending.