New banks need to attune with national priorities: FM
With just 40% of India’s population having bank accounts, finance minister Pranab Mukherjee on Saturday exhorted banks to do more for financial inclusion. Speaking at the FE Best Banks Awards ceremony, Mukherjee said he expected “the new banks which are going to come would be in a position to effectively compete with existing players and attune themselves with national priorities”. This, the finance minister said, included government schemes for mandated lending, priority sector lending and on financial inclusion.
While coaxing banks to continue to strive for further excellence, Mukherjee said the most important aspect of the FE Best Banks Awards event, now in its 15th year, was that it set benchmarks for others to try and live up to it. Recognising the role played by public sector banks, which account for nearly three-fourths of bank lending, the FM said in the last quarter there had been a 10-20% growth in the topline of banks and a profit growth of more than 25%.
Referring to the crisis in global banking, the FM said this highlighted the need to take a serious look at the fragmented regulatory system in global financial markets. Giving the Indian regulatory system a pat on its back, he said Indian banks continued their robust growth while not compromising on asset quality. “The issue of financial stability and the banking system,” the FM said, “have now become an integral part of policy discussions and macro-economic objectives in the developed and the developing world.” It is, he said, “a testimony to
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