Need four-five more banks like State Bank of India: Finance Minister Sitharaman

Tribune News Service

New delhi, September 26

Union Finance Minister Nirmala Sitharaman has said that India needs four or five more banks like State Bank of India (SBI) as the Indian banking sector needs to be scaled in light of shifting recent 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 keynote address at the 74th Annual General Meeting of the Indian Banks’ Association (IBA) in Mumbai on Sunday.

The Finance Minister exhorted the industry to visualise the shape Indian banking in the immediate and long-term future. 

“If we look at post-Covid scenario, India’s banking contour 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 DBT and digital mechanisms.”

The Union Minister underlined the importance of seamless and interconnected digital systems in creating a sustainable future for Indian banking industry. “Long-term future of Indian banking is going to be largely driven by digitised processes.”

At the same time, the Finance Minister observed that there are wide disparities as well in access to financial services. “Almost two-thirds of nearly 7.5 lakh panchayats have optical fibre connection. 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 physical branch. 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.

The Minister appreciated banks for executing amalgamation of banks even during the pandemic, without causing disruption in services to customers. “I commend that you ensured that amalgamation did not inconvenience customers, you ensured that systems of different banks spoke to each other, you have kept yourselves available during the pandemic in serving customers, while also ensuring that banks’ amalgamation happened without friction, without aberrations,” she said.