India still needs effective public sector banks: Modi
Prime Minister Narendra Modi on Friday stressed on increasing credit to businesses to meet the needs of a fast reflating economy and said financial products will have to be tailor-made for fintech and startups.
He said that although the government’s endeavour is to promote the private sector, the public sector still needs to have their presence in banking and insurance to support the poor.
“Our top priority is to ensure that the depositor as well as the investor experiences trust and transparency. The old ways and old systems of banking and non-banking sectors are being changed,” Mr Modi said, pointing to the "severe harm” done to the banking and financial sector “10-12 years ago in the name of aggressive lending”.
Mr Modi said this while addressing a webinar on effective implementation of Budget provisions related to financial services.
The Centre, he said, had taken steps to free the country from a ‘non-transparent credit culture’ where non-performing assets (NPAs) were brushed under the carpet.
Mr Modi said to help medium and small businesses during the Covid pandemic, 90 lakh Micro, Small and Medium Enterprises (MSMEs) were given credit worth `2.4 trillion.
“Supporting MSME and startups and expanding credit flow to them is necessary. The government has undertaken reforms and opened up sectors like farm, coal and space. Now it’s the responsibility of the financial sector to understand the aspirations of rural and smaller cities and make them the strength of Aatmanirbhar Bharat.
“We understand the uncertainties of the business and recognise that every business decision is not underlined by bad intentions. In such a scenario, it is the responsibility of the government to stand by business decisions taken with a clear conscience, we are doing this and will continue to do so,” he stated.
The new policy of disinvestment of public sector enterprises covered the financial sector as well, and private enterprises were being promoted wherever possible, he noted.
THE PRIME Minister stressed on increasing credit to businesses to meet the needs of a fast reflating economy and said financial products will have to be tailormade for fintech and startups.