“Today strength of the country’s banks has increased so much that they can provide new energy and a big push to the economy and play a crucial role in making Atmanirbhar Bharat a reality,” Modi told bankers at a conference.
“The demand of the times is that the country’s banks should think of improving the country’s balance sheet proactively along with improving their balance sheets,” said the PM, adding that the current phase was a major milestone for the banking sector and a major starting point.
The PM’s comments are being seen as a major outreach to state-run banks to lend and help in the economic recovery underway. Several indicators have pointed to a robust recovery and the government is making all-out efforts to ensure that investments start kicking off and help accelerate growth.
Over the last few days, the Centre has reached out to states and industry in a bid to enhance investment and spur growth. Finance minister Nirmala Sitharaman first met state CMs and then India Inc.
In a speech on Thursday, the PM nudged bankers to offer customised solutions to its customers. “Don’t wait for the customer to come to your bank. Go to them. You have to analyse the needs of your customers, companies, MSMEs and offer customised solutions,” he said and made it clear that there has to be a change in mindset and the business as usual approach has to be shed.
“I am the approver and the person across the table is an applicant, I am a lender and the person in front is seeking a loan approach has to be discarded by banks and they will have to adopt a model of partnership,” said the PM, highlighting the need for stepping up efforts to push lending and have a customer-centric approach.
He exhorted banks to reach out to companies, which would be part of defence corridors, beneficiaries of the PLI scheme and those in the infrastructure sector. He said banks should set a target at the branch level to ensure that they will join hands with 10 youth or 10 small enterprises to help them in their businesses.
Arguing that a strong foundation had been laid for the economy to leapfrog, the PM said the banking sector needs to step up after a series of measures to improve their financial health. “It is because of these decisions that resolution and recovery is better and banks are in a stronger position and found inherent strength… Today NPAs in public sector banks are at the lowest level in five years despite Covid. The strength of the banking sector during the first half has attracted everyone’s attention and that is why international agencies have upgraded the outlook on Indian banks.”
Pointing to several initiatives such as GST, Jan Dhan, Swanidhi and Swamitya, he said banks had a lot of data with them which they should tap to accelerate lending. The PM urged banks to move at least 100 large clients in each branch to fully digital transactions by August 15 next year.