Many districts lack banking presence despite high economic activities: FM Nirmala Sitharaman

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Union Finance Minister Nirmala Sitharaman on Sunday said that various districts in the country lack banking presence despite high level of economic activity taking place in these areas. While addressing Indian Bank’s Association (IBA), Sitharaman asked lenders to facilitate efforts by expanding its presence. She also gave lenders an option to decide which place would require a brick-and-mortar model and where a step-down presence is needed. She also made it clear, that she is not against digitalisation and efforts.

Banks have to be nimble

She said that the recapitalisation requirements will go down, as the banks books are much cleaner now and would help the government.

The upcoming National Asset Reconstruction Company should not be classified as bad bank, as it is called in the US, the finance minister said.

In order to achieve $400 billion exports target, banks have to be nimble and understand every unit’s need , she added.

More SBI-sized banks needed

India is growing and needs 4-5 banks of the size of State bank of India to meet meet of the economy, finance minister Nirmala Sitharaman said on Sunday. She said the industry needs to imagine how Indian banking has to be in the immediate and long-term future.

As far as the long-term future is concerned, she said it is going to be largely driven by digitised processes and there is a need for seamless and interconnected digital systems for a sustainable future for the Indian banking industry.