“The commitment to moderate levels of inflation has led to higher interest rates. In this environment, banks need to keep a strong vigil on their asset quality.
These are turbulent times and we should watch every step that we take,” Mukherjee said at 106th foundation day of Bank of India here.
“The global economy is still trying to cope up with the after effects of the financial crisis...But this should not prevent us from taking bold and innovative steps,” he said.
Highlighting the importance of financial inclusion, he said, the government firmly believes that it is necessary condition for inclusive growth. The public sector banks have to play an important role in financial inclusion in the country given the distribution platform they enjoy and experience they have in serving the rural hinterland for the past five decades.
He also said technology needs to be leveraged to scale up the financial inclusion initiative. Financial inclusion would make better business sense if banks make that extra effort in developing appropriate business models, he said, adding, “rural banking is a business opportunity waiting to be tapped and should not be seen only as a social responsibility to be met by the banks.”
In addition to financial inclusion, Mukherjee said, the banks need to help nurture entrepreneurial talent in the rural India through lending and other required assistance. “When I talk of entrepreneurial talent, the SME segment comes to my mind which has a very high potential for income and employment generation in the country,” he said. Banks can play a constructive role by financing the SME segment, he added.
