Banks need a mindset shift: PM Modi
Premium- He said the reforms undertaken by the NDA government have addressed past challenges in the banking sector one by one and banks’ financial health is now much better
Prime Minister Narendra Modi on Thursday said that banks need to shed the impression that they are the givers and customers are the recipients and instead, embrace a partnership approach to help create wealth, add jobs, boost the economy and achieve self-reliance.
Speaking at a conference organized by the finance ministry on ‘creating synergies for seamless credit flow and economic growth’ in the capital, Modi said the reforms undertaken by the NDA government have addressed past challenges in the banking sector one by one and banks’ financial health is now much better.
“Indian banks are strong enough to play a major role in imparting fresh energy to the country's economy, for giving it a big push and making India self-reliant," Modi said in his speech delivered in Hindi. The Prime Minister told leaders from the industry, banking sector, and officials that when the country is working hard on financial inclusion, it is very important to unlock the productive potential of the citizens and that the banking sector needs to think big and be innovative in approach.
“This is a time for you to support wealth creators and job creators. It is the need of the hour that now the banks of India work proactively to bolster the wealth sheet of the country along with their balance sheets," Modi said.
Modi’s emphasis on banks adopting a partnership approach is significant given that easier access to credit to small businesses, entrepreneurs and those in the hospitality and tourism sector hit hard by the pandemic has been a key element of the government’s economic revival strategy. The government took several measures during the pandemic to improve the liquidity conditions of businesses including a loan moratorium, cuts in the rate of taxes to be collected or deducted at source, and extension of due dates for various tax payments.
Modi said that reforms in the banking sector in the last 6-7 years, supported the banking sector in every way, due to which the banking sector is in a very strong position today.
“We addressed the problem of non-performing assets, recapitalized banks, and increased their strength. We brought reforms like the Insolvency and Bankruptcy Code (IBC), reformed many laws, and empowered debt recovery tribunal," Shri Modi said.
Modi said that banks have sufficient liquidity and no backlog for provisioning of NPAs as NPA in public sector banks is at the lowest in the last five years. This has led to the upgrading of the outlook for Indian banks by international agencies, the Prime Minister said.
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He also emphasized the need to proactively serve the customers and asked the banks to provide customized solutions to customers, companies, and MSMEs after analyzing their needs.
Modi also urged lenders to play an active role in making the government’s production linked incentives (PLI) scheme a success. The scheme offers incentives for investors to set up factories and boost local production. “Banks can play a big role in making projects viable through their support and expertise," an official statement from the Prime Minister’s office said quoting Modi.
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