India must establish world class banks, urges PM

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Pune: Prime Minister Narendra Modi on Saturday called upon India’s banking sector to establish banks which are world class and rank among the top in the world.

Emphasising that the banking sector of a country mirrors its economic growth and progress, Modi said Japan and China have banks which were ranked among the top 10 globally during their economic rise.

Addressing India’s top bankers at the end of a two-day bankers retreat ‘Gyan Sangam’ here Saturday evening, Modi assured that banks would run professionally without any interference, but accountability was essential.

He called for an end to “lazy banking” and asked banks to take on a “pro-active role” in helping the common man.

On this front, he emphasised the need for public sector banks (PSBs) to set goals for the 75th anniversary of India’s independence in 2022.

Modi said he has resolved to provide housing for all by 2022 and banks had a huge opportunity in this as 11 crore (110 million) homes were required in the country.

Calling upon banks to redefine the parameters for success, Modi said they could prioritise loans to enterprises which would generate more employment, give importance to loans to students as they would be a very productive investment for the country as India needs to develop skills of the youth in a big way.

Modi said the government had no vested interest in the banking sector and public sector banks can derive strength from this.

“We are against political interference, but support political intervention in the interest of the people. This will enable the voice of the common man to reach such institutions,” he said.

He urged the 27 public sector banks in India to develop common strengths among themselves in areas like software and advertising.

Citing the example of number portability in the telecom sector, he said it could improve the customer-centric focus of banks.

“The public sector banks – as a team – should also be conscious of the direction in which the country is moving and work towards simplifying procedures to facilitate the common man,” he said.

The prime minister lauded the role of banks in successfully implementing the Pradhan Mantri Jan Dhan Yojana, which he said would have “multiple effects” and redefine goal-setting among banks due to enhanced confidence levels following its success.

Modi said seven crore (70 million) families – or one-third in India – benefited from the direct cash transfer of LPG subsidy in just the first three days of 2015.

Highlighting the issue of financial illiteracy among the common masses, Modi called upon banks to “trust the common man” and encourage competitions on financial literacy in schools on the lines of ‘mock parliament’ competitions.

As part of their corporate social responsibility (CSR) initiatives, the prime minister felt that banks should take up one sector each year to play a positive role and asked each PSB to help develop 20,000-25,000 Swachhta entrepreneurs as part of the Swachh Bharat Abhiyaan.

Terming the ‘Gyan Sangam’ as a unique initiative, Modi said it reflects team spirit and a collective will to address issues and find solutions to problems which was the first step towards catalysing transformation.

He acknowledged that this was perhaps the first time banks had given tasks to the prime minister through a presentation and said informal discussions helped achieve a ‘meeting of minds’, which in turn enables setting strategic goals.

Maharashtra Governor C.V. Rao, Chief Minister Devendra Fadnavis, Union Finance Minister Arun Jaitley, Minister of State for Finance Jayant Sinha, RBI Governor Raghuram Rajan, financial services secretary Hasmukh Adhia, top heads of banks and financial institutions were present on the occasion.

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