Calling for an end to "lazy banking", Prime Minister Narendra Modi on Saturday said he is against any political interference in functioning of banks but supports necessary "intervention" in the public interest.
Calling upon the banking sector to establish banks which rank among the top banks of the world, Modi said that banks need to be run professionally and assured them that there would be no interference.
"But accountability is essential," Modi said while addressing top executives of public sector banks and other financial institutions here on the last day of a two-day bankers' retreat, 'Gyan Sangam'. Modi said that the government had no vested interest, and public sector banks can derive strength from this fact.
Stating that India is a democracy, Modi said he is against political interference, but supports political intervention, in the interest of the people. He said "political intervention will enable the voice of the common man to reach such institution".
Modi also called for an end to "lazy banking" and said that banks need to take a proactive role in helping the common man. Later briefing reporters at the end of the retreat, Financial Services Secretary Hasmukh Adhia said the Prime Minister told bankers that they will not receive calls from the Prime Minister's Office (PMO).
Modi also asked the banks to develop dedicated teams to fight cyber crime and also highlighted the issue of poor financial literacy in the country. Emphasising on the need for Indian banks to reach top of the global lists, he said, "the banking sector of a country mirrors its economic rise. Japan and China had banks in the top ten banks of the world during their economic rise." The two-day retreat is being attended by top bankers including SBI Chairman Arundhati Bhattacharya and was addressed by Finance Minister Arun Jaitley as well as Reserve Bank Governor Raghuram Rajan.
"As part of Corporate Social Responsibility, banks should take up one sector each year to play a positive role," he said adding banks should redefine parameters for success and prioritize loans to enterprises that generate more employment.
For public sector banks, Modi said with 81% of branches and 77% of deposits, their net profits should improve from current levels of 45%. Emphasising on the need for developing common strengths among the 27 public sector banks, he suggested infrastructure sharing in areas such as software and advertising.
Giving the example of number portability in the telecom sector, he said PSU banks, as a team, should also be conscious of the direction in which the country is moving, and work towards simplifying procedures to help common man. Stating that the 'Swachh Bharat Abhiyan' has caught the imagination of the younger generation, Modi advised public sector banks to develop 20,000-25,000 Swachhta entrepreneurs. He also asked banks to prioritise loans to students as this would be a very productive investment for the country, while adding that the country needs skill development for its youth in a big way, and banks need to take the lead in this.
With a requirement of 11 crore houses by 2022 to achieve the target of 'houses for all', the sector presents a huge opportunity to banks, he said. The Prime Minister also called upon banks to trust the common man.
Calling Gyan Sangam an unique initiative, Modi said the retreat reflected team spirit and a collective will to address issues.
Referring to a blueprint prepared by the bankers at this retreat and given to him, Modi said it was probably the first time that "banks had given tasks to the Prime Minister through a presentation". He said the objective of this retreat was to find solutions to problems, and this was the first step towards catalysing transformation. Informal discussions helped achieve meeting of minds, which in turn enabled strategic goal setting, he added.
With banks achieving the target of opening 10 crore accounts under the Jan Dhan Yojana a month ahead of schedule, Modi said this would help redefine goal setting among banks.
Prime Minister said 7 crore families had benefited from direct cash transfers of LPG subsidy in just three days since its nationwide launch from January 1, adding that this represented one-third of all families in India.
Modi called upon banks to take the lead in encouraging competitions on financial literacy in schools and they should as part of CSR take up one sector each year.
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