Need more SBI-like banks, says Nirmala Sitharaman

New Delhi, September 26

Union Finance Minister Nirmala Sitharaman has said India needs four or five more banks like the SBI as the Indian banking sector needs to be scaled up in the light of shifting realities of economy and industry.

“The way in which the economy is shifting to a different plane altogether, the way in which industry is adapting, so many new challenges keep arising. To address these challenges, we need not just more, but bigger banks.” The Union Minister said during the keynote address at the 74th annual general meeting of the Indian Banks’ Association (IBA) in Mumbai on Sunday.

Must go digital

Long-term future of Indian banking is going to be largely driven by digitised processes. —Nirmala Sitharaman, Finance minister

The Finance Minister exhorted the industry to visualise the shape of Indian banking in the immediate and long-term future. “If we look at the post-Covid scenario, India’s banking contours will have to be very unique, where there has been an extremely successful adoption of digitisation. While banks in many countries could not reach out to their clients during the pandemic, the level of digitisation of Indian banks helped us to transfer money to small, medium and big account-holders through the DBT and digital mechanisms.” The Finance Minister underlined the importance of seamless and interconnected digital systems in creating a sustainable future for Indian banking industry. At the same time, the Finance Minister observed that there were wide disparities as well in access to financial services.

“Almost two-thirds of nearly 7.5 lakh panchayats have optical fibre connection. The IBA should consider this and conduct an exercise and decide where banks should have a physical presence and where we are able to serve customers, even without a physical branch. The IBA should take the initiative and complement government’s efforts for financial inclusion and enhancing access to financial services, especially in unserved and under-served areas,” she suggested. — TNS