Arun Jaitley banks on improved government support for stronger performance of banks

MUMBAI: Finance minister Arun Jaitley said that there is a need for greater spending in rural India, improve infrastructure and revival of private sector investment for steady growth of the economy. At the same time he expressed concerns faced by PSU bankers in going ahead with fair resolution.

"We are faced with mechanisms where public servants have constraints of law and at times even the fear of future consequences they are unwilling to go in for fair settlements because that is the environment in which they function and therefore the issues are pending in courts,” said Jaitley at the 69th Annual General Meeting of Indian Banks’ Association.

Speaking at the same event Anjuly Chib Duggal, secretary in department of financial services said that the joint lenders forum – where banks jointly work out a mechanism to resolve stressed loan- has not worked the way it ought to have worked.

Jaitley pointed out that not only are the banks being empowered, the cause of the stress in each of these sectors are being addressed. "It is our responsibility to ensure that the economic and functional environment in which the banks function is favourable which will have an impact both on the banks and the system. If that is worked on then it will increase the capacities of banks,”

"We need greater spending in our rural areas. We need social and physical infrastructure to be created and revive private sector investment to support that kind of growth we need a robust banking system,” He also pointed that the capacity of banks to support growth must never be allowed to dilute. "We need to maintain their capacity to support growth.
Duggal spoke about the changing landscape of banking sector with new small banks, payment banks and fintech companies making inroad in financial sector. She hinted that very soon CEO of government owned India Post Payment Bank will be appointed.

She also pointed out that banks should use branches of regional rural banks for the outreach programme as they have thousands of branches spread across the country. Further, bank managers should be authorised to issue appoint Bank Mitra or business correspondence.