Mukherjee urges Indian banks to become on par with global players

Union Finance Minister Pranab Mukherjee at the Foundation Day Function of the Bank of India, in New Delhi on September 07, 2010.

Finance Minister Pranab Mukherjee today said financial services were vital for economic resilience and Indian banks must grow in size to be able to offer services on par with global players and have appropriate systems in place to manage growth.

"As the global banking landscape has been changing fast, I look forward to the time, not very far away from now, when Indian banks would reign among the top global brands," he said at the 105th Foundation Day celebrations of the public sector Bank of India here.

"This growth aspiration must drive our banks’ future plans and actions with financial stability, resilience, vision and social commitments," he said.

Mr Mukherjee said the Indian economy was, at present, going through a phase of recovery with high Gross Domestic Product (GDP) growth. He said the commercial banks and the public sector banks, in particular, had performed quite well in terms of high credit growth, deposit mobilisation and profitability, apart from meeting their socio-economic commitments.

The Finance Minister praised Bank for India for weathering many crises and capitalising on many opportunities in the course of it 104-year journey. He noted that it was one of the largest Indian banks now with a business mix of over Rs. 410,000 crore, serving 37 million customers through its 3250 domestic branches and 29 foreign offices.

Mr Mukherjee said growth had to be inclusive for continued existence and prosperity. "Our high growth will have little meaning if our poor and excluded people do not have access to basic needs based on equitable, sustainable as well as just and fair share of this national prosperity. Financial inclusion will enable all of us to broaden our base by empowering the poor by assisting them to improve their standard of life," he stressed.

He said the major barriers for the poor to access appropriate financial services included lack of education, low and irregular income, mandatory requirements of documentation and product design factor.

He said promoting technological and institutional innovation as a means to expand financial system access and usage, including addressing infrastructure weaknesses could provide an answer to such barriers. He said that, today, there was no dearth of technology and its transformational role could not be over-emphasised.

"Scalable financial inclusion cannot happen without stable and reliable information and communication technology and appropriate outreach of our banks," he said.

Mr Mukherjee urged Bank of India and other banks to over-perform to achieve their target so that by 2011 all habitations with populations of more than 2000 get the facility of a bank and related financial services.

NNN