Deepen Bank Network in Rural India: FM

Finance minister Nirmala Sitharaman appealed to banks to deepen their branch network, especially in the interiors which have high level of economic activity but continue to lack banking services.

“Even today many panchayats don’t have a bank branch. I am not saying that you need to have a physical presence everywhere, digitisation has saved a lot of costs without compromising the service banks provide,” the minister told banking industry lobby grouping Indian Banks Association.

“The banks and IBA among themselves can decide where you need to be physically present and where digital services can be extended,” Sitharaman said. “A good rationalised approach will help the government’s financial inclusion agenda.”

Sitharaman said the IBA should digitalise and map banking presence in each districts and identify gaps, adding that she is not against digitalisation.

On the setting up of the National Asset Reconstruction Company, Sitharaman said banks’ books are much cleaner now and this will help the government as the recapitalisation requirements go down.

“The burden on government will be far lesser as your books will be cleaner,” she said.

The minister also praised banks that have joined the account aggregator framework, and said financial inclusion cannot happen if credit doesn’t reach far and wide.

“The future of credit outreach can happen throughout the year, through the system, and there need not be separate credit outreach programmes,” she said. “If account aggregator model is put to use in the right way, credit will be available on tap, without worry, to even small customers who reach you.”

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