Prompt corrective action has helped PSBs to tide over turbulent times: FM
India’s public sector banks are stable now after the prompt corrective actions (PCA) when they were caught in turbulence, said Union Finance Minister Nirmala Sitharaman.
Speaking at the Tamilnad Mercantile Bank’s (TMB) centenary celebrations here on Sunday, Sitharaman said prior to 2014, the public sector banks were facing various problems.
The public sector banks were laden with huge non-performing assets (NPA) which was a serious concern for the future of the banking sector itself.
Sitharaman said a problem in the banking sector would impact the entire economic activity.
According to her, the government infused additional capital into public sector banks.
It was then prompt corrective action was taken and the public sector banks are back on the rails now, she said.
Even as the banking sector was in turbulence, TMB was carrying out its business efficiently, Sitharaman added.
Appreciating TMB, which was started as a Nadar community bank in 1921 and now gained universal acceptance, Sitharaman said the way forward is digitisation.
Stating that the Centre distributed Rs 1,500 in three instalments to the needy through their bank accounts during the COVID-19 outbreak, she said there are lot of changes happening in the banking sector at a “fast pace” through digitisation.
She said technology related solutions take away a lot of other problems. “There is no necessity to open a branch in a place which does not have a bank. Today, to reach a bank account of the people who live there, all kinds of technologies are available...Even sitting from Thoothukudi, one can serve the banking requirements of people living in small villages through technology”, she said.
“The way forward for any bank, particularly for a bank like Tamilnad Mercantile Bank, to be more efficient, is to adopt complete technology related solutions,” she said.
“Today financial technology is the biggest area and using that we can able to populate data into forms. It may be Income Tax or GST related. Auto-populating data (of a consumer) has been very useful (today),” she said.
Auto-populating data can be done only through ‘digitisation’ and the management of TMB should think of greater use of digitisation, she said.
According to her, using financial technology one can cross populate data and one can assess credit rating which is possible only with digitisation.
Referring to TMB’s deposit base of Rs 41,000 crore and advance portfolio of Rs 32,000 crore, Sitharaman said: “If that is the rapidity with which you are using the money to make more businesses work, it is possible to be more efficient if you adopt complete technology related solutions.”
According to KV Rama Moorthy, MD & CEO, TMB, as a part of their Centenary celebrations, the bank is kick-starting multiple initiatives, starting with the issuance of a special postage stamp and postal cards.