Nirmala Sitharaman: India Requires Four SBI-Sized Banks To Meet Its Needs

To fulfil the changing needs of the economy, Finance Minister Nirmala Sitharaman has stated that the country requires at least four banks the size of SBI.

Nirmala Sitharaman: India Requires Four SBI-Sized Banks To Meet Its Needs
Nirmala Sitharaman: India Requires Four SBI-Sized Banks To Meet Its Needs

Finance Minister Nirmala Sitharaman has stated that the country requires at least four banks the size of the State Bank of India (SBI) to address the economy's rapidly changing needs, particularly as digitalization grows.

Ms Sitharaman, speaking at the Indian Banks' Association's 74th annual general meeting on Sunday, said that in the post-Coronavirus world, Indian banks have adapted to the digitised system faster than many nations, but that “at least four SBI sized banks are required to meet the present and future challenges in the banking system.” Given the changing realities of the economy and industry, we need to build up banking to suit changing needs.” 

She emphasised the importance of fully adapting to digital infrastructure, noting that Indian banks will require new technology, the shape of which will have to be extremely specific to India.

Highlighting the fact that despite witnessing hectic economic activities, several rural areas still lack banking facilities, efforts should be made to not only ensure the physical presence of banks' branches in such areas but should be ensured that wherever there are no physical branches of banks, financial transactions are conducted through a digitised framework.

“Through digital mapping of such areas, banks should find out where physical presence is needed and where customers can be served digitally,” the finance minister said during her 30-minutes address. She believes that now that over two-thirds of panchayats are connected to the optic fibre network, banks should reach out to them and assure their financial inclusion through digitalization. 

“You saw to ensure that the clients did not suffer during the amalgamation process,” Ms Sitharaman added, praising the organisation for ensuring that bank mergers were conducted smoothly even during the raging Coronavirus outbreak. You were effective in moving the government's agenda forward and ensuring that it was a successful exercise. And it happened without causing customers any disruption, friction, or difficulty."