Public Sector Banks and Insurers need to level-up and be effective and the centre will continue to ensure that with banking reforms. It will also promote private enterprises, said Prime Minister Narendra Modi.
The Prime Minister stated, “Our top priority is to ensure that the depositor as well as the investor experiences trust and transparency. The old ways and old systems of banking and non-banking sectors are being changed.”
He further pointed out that. the banking and financial sector had been harmed severely in the last 10-12 years in the name of aggressive lending.
Prime Minister was addressing a webinar on effective implementation of Budget provisions regarding financial services.
The centre, had taken severe steps to free the country from a ‘non-transparent credit culture’ where non-performing assets (NPAs) were brushed under the carpet, said PM.
“We understand the uncertainties of the business and recognise that every business decision is not underlined by bad intentions. In such a scenario, it is the responsibility of the government to stand by business decisions taken with clear conscience, we are doing this and will continue to do so,” he added.
He further stated that the new policy of disinvestment of public sector enterprises has covered the financial sector holistically, and private enterprises are being promoted wherever possible, he replied.
“Still, along with this, an effective participation of the public sector in banking and insurance is still needed by the country. To strengthen the public sector, equity capital infusion is being emphasised. Simultaneously, a new ARC (asset reconstruction company) structure is being created which will keep track of the NPAs of banks and will address loans in a focussed way,” he replied while adding that the ARC would further strengthen the public sector banks.
He said that banking and financial sector is critical to achieve the Atma Nirbhar Bharat vision, and it significantly includes the creation of modern infrastructure. The centre is committed towards carrying out further reforms in the banking sector, he stated.
During the virtual confluence he urged the financial sector entities to create innovative financial products dedicated to the farmers, small vendors and micro, small and medium enterprises.
“Self Help Groups’ capability from services to manufacturing and their financial discipline make them an ideal channel for investment in the rural infrastructure. It is not just a welfare issue but also a great business model,” he stated.