FM Sitharaman thanks IBA for coming up with NARCL, says it is not a 'bad bank'
PremiumSitharaman said the government will closely work together with IBA and they would be able to restructure and sell the NPAs
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Union Finance Minister Nirmala Sitharaman on Sunday said National Asset Reconstruction Company Ltd (NARCL) is not a “bad bank", as is the case in the United States, because it is purely bank driven.
“It's a formulation which has saved us from imitating something which we were all averse to, at least for its name. This is not a 'Bad Bank.' 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," Sitharaman said.
Addressing the 74th Annual General Meeting of the Indian Banks' Association (IBA), Sitharaman thanked the association for having come together in establishing the NARCL in the testing times.
"The government will closely work together with IBA and they would be able to restructure and sell the NPAs," the finance minister said.
Sitharaman said banks are now able to raise money from the market, hence the burden on government to recapitalise the banks will be less, adding that this is how we want banks to function - lot more professional, with a changed mindset.
FM commended IBA for completing 75 years of foundation, noting that not many associations have the fortune of having their lifespan parallel to the journey of their country.
Sitharaman said IBA should take the initiative and complement government's efforts for financial inclusion, providing access to financial services, especially in unserved and under-served areas.
"Through a rationalised approach and optimal utilization of digital technologies, we need to improve access of banking in every district."
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Finance Minister exhorted IBA to do digitised location-wise mapping of all bank branches for every district of the nation and serve customers even without physical branch.
Speaking on the impact of pandemic on bankers, FM said a major challenge bankers faced particularly during the pandemic was the government's agenda of amalgamation of banks. "This happened during the pandemic, even as banks were rushing to help those even in remote areas of the country."
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