India needs 4-5 more banks that are as big as SBI: FM

India needs 4-5 more banks that are as big as SBI: FM Sitharaman

During her address in India's financial capital, she stressed extensively on digitisation and underlined the importance of seamless and interconnected digital systems

Union Finance Minister Nirmala Sitaraman. Credit: PTI Photo

Underlining the importance of large banks, Union Finance Minister Nirmala Sitaraman on Sunday said that India needs four to five more lenders like the State Bank of India (SBI).

“India needs 4 to 5 more banks like SBI to meet changing requirements of the Indian economy,” Sitharaman said during the keynote address at the 74th Annual General Meeting of the Indian Banks’ Association (IBA) in Mumbai.

“The way in which the economy is shifting to a different plane altogether, the way in which industry is adapting, so many new challenges keep arising. To address these challenges, we need not just more, but bigger banks,” she said. 

During her address in India's financial capital, she stressed extensively on digitisation and underlined the importance of seamless and interconnected digital systems in creating a sustainable future for the Indian banking industry.

Also Read | Indian economy on sustained path of revival: Finance Minister Nirmala Sitharaman

“If we look at post-Covid-19 scenario, India's banking contour will have to be very unique to India, where there has been an extremely successful adoption of digitisation. While banks in many countries could not reach out to their clients during the pandemic, the level of digitisation of Indian banks helped us to transfer money to small, medium and big account holders through DBT and digital mechanisms,” she said.

The benefits of digitisation notwithstanding, the Finance Minister observed that there are wide disparities as well in access to financial services. She said there are parts of our country where brick-and-mortar banks are necessary. 

Sitharaman asked the IBA to improve access to banking in every district through a rationalised approach and optimal utilisation of digital technologies.

To achieve this, she advised IBA to carry out digitised location-wise mapping of all bank branches for every district in the country. 

“Almost two-thirds of nearly 7.5 lakh panchayats have optical fibre connection, IBA should consider this and conduct an exercise and decide where banks should have a physical presence and where we are able to serve customers even without a physical branch. IBA should take the initiative and complement the government's efforts for financial inclusion and enhancing access to financial services, especially in unserved and under-served areas.”

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