PSU banks to introduce new products in 3-4 months to boost credit growth: Bank Secretary
Finance Secretary M Nagaraju on Tuesday said that public sector banks will introduce new products in the next few months to boost credit growth.
“We are actually committed to development, and we want to include as much credit as possible because we have a large number of young people,” he said while speaking at the Financial Inclusion and Fintech Summit organized by CII here.
Public sector banks will introduce new products in the next 3-4 months to advance credit to all sectors, including MSME, he said.
Over the past few years, the government has already taken a number of steps to improve access to credit for small borrowers, including announcing a new credit model in the Budget for lending to borrowers with no previous financial records.
Although the banking sector is strong, Nagaraju said the rise of digital fraud poses a threat to financial stability, and banks should focus on addressing this challenge.
Both new digital technologies and financial literacy will help reduce this, he added.
Speaking on the sidelines, Nagaraju also said that the Banking Amendment Bill introduced in Parliament during the monsoon session is likely to be withdrawn in the ongoing winter session.
These amendments are intended to bring about changes in banking laws, including redefining capital interest for directors, increasing the number of nominees for bank deposits and changing the reporting dates for compliance.
Speaking on Fintech, he said that India is the third largest startup country, and there are around 13,000 such organizations operating in the space.
The government remains committed to the goal of financial inclusion and is working closely with the fintech industry to achieve greater inclusion, especially in underserved areas.
“The government is making a lot of efforts to make it easier to do business and reduce the compliance burden on Fintech companies,” he said.
He emphasized on the government’s ongoing effort to provide an enabling ecosystem for the fintech industry, including strong digital infrastructure and initiatives such as the PM Suraksha Bima Yojana and the Atal Pension Yojana, which can bring huge opportunities to the industry.
“A fine balance is needed between encouraging innovation and protecting the integrity of the regulatory system,” he warned.
Speaking at the event, the Chairman of Nabard, Shaji KV, emphasized the need to bring technological change in a democratic way, especially in the rural economy.
While central banks have benefited from massive digitization, cooperative banks and rural banks may not have reaped the benefits of digitization to the same extent, Shaji added.
Given that these banks may not have enough capital to invest in new technologies, it is important that all stakeholders make a concerted effort to involve RRBs and cooperative banks in new digital activities, he said.
In this context, he recommended that fintech companies can use the recently announced government programs to bring improved growth equity in the country.
