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New Delhi, July 30, 2020
Prime Minister Narendra Modi on Wednesday interacted with stakeholders from banks and non-banking financial companies (NBFCs) to discuss the vision and the roadmap for the future of the sector.
An official press release said the meeting discussed, in particular, the crucial role of the financial and banking system in supporting growth.
The meeting felt that the small entrepreneurs, self-help groups (SHGs) and farmers should be motivated to use institutional credit to meet their credit needs and grow.
Participants said each bank needed to introspect and take a relook at its practices to ensure stable credit growth. Banks should not treat all proposals with the same yardstick and need to distinguish and identify bankable proposals and to ensure that they get access to funding on their merit and don’t suffer in the name of past NPAs, they felt.
It was emphasised that the Government is firmly behind the banking system. The government is ready to take any steps necessary to support it and promote its growth, the release said.
Banks should adopt fintech like centralised data platforms, digital documentation and collaborative use of information to move towards digital acquisition of customers. This will help increase credit penetration, increase ease for customers, lower costs for banks and also reduce frauds, the participants felt.
India has built a robust, low cost infrastructure which enables every Indian to undertake digital transactions of any size with great ease. Banks and financial institutions should actively promote the use of RUPAY and UPI amongst its customers, they said.
The progress of schemes like emergency credit line for MSME, additional KCC cards, liquidity window for NBFC and MFI was also reviewed. While it was noted that significant progress has been made in most schemes, banks need to be proactive and actively engage with the intended beneficiaries to ensure that the credit support reaches them in a timely manner during this period of crisis, the participants said.