Prime Minister Narendra Modi today asked public and private sector banks to support wealth and job creators especially by investing in ideas thrown up by the start-up ecosystem.
Banks should work not just towards building up their balance-sheets but also the “wealth sheet of the country”, said the PM.
Partnership model
Addressing chief executives of the country’s public and private sector banks, at a conference on ‘Creating synergies for seamless credit flow and economic growth’, Modi asked them to adopt a partnership model with businesses rather than looking at it as a relationship between “loan approver and a loan applicant”.
He pointed out that banks were flush with liquidity and there should be all round effort to help corporates and MSMEs scale up.
“Today, there is a need to unlock the productive potential of Indian citizens. The more you invest in citizens and their ideas, the more employment can be achieved. You have to align your efforts with the government’s goals,” Modi said.
Asserting that Indians are quick to adapt to new technologies, Modi urged bankers not to delay initiatives when it came to fintech. He also set a target for banks: By August 15, 2022 (75 years of Independence) every bank branch in the country must have at least 100 customers who are completely digital in their functioning.
The Prime Minister said that reforms initiated in the banking sector in the last 6-7 years had helped the sector reach a strong position today.
Modi said that ways were found to address the problems and challenges from before 2014 one by one. “We addressed the problem of NPAs, recapitalised banks and increased their strength. We brought reforms like IBC, updated many laws and empowered debt recovery tribunal. A dedicated stressed asset management vertical was also formed during the Covid period,” he said.
Steps taken in the recent years have created a strong capital base for the banks. They have sufficient liquidity and no backlog for provisioning of NPAs, which are at their lowest in the last five years. This has led to the upgrading of the outlook for Indian banks by international agencies, he added.
Bad debt recovered
The Prime Minister said that over ₹5-lakh crore of bad debt had been recovered by the banking system and that the new National Asset Reconstruction Company Ltd is expected to address ₹2-lakh-crore stressed assets.
On the proposed web-based project funding tracker to bring together ministries and banks, Modi suggested adding the Gatishakti Portal as an interface may be better.