Time for banks to support wealth & job creators: PM Narendra Modi

More than Rs 5 trillion recovered by banks from defaulters

While addressing bankers on Thursday, Prime Minister Narendra Modi said it is time for banks to support wealth and job creators, and improve theirs, as well as the country’s balance sheet.

With a strong capital base and declining non-performing assets (NPAs), public sector banks have been strengthened to give the economy a push and play an important role in making India aatmanirbhar.

“I am seeing this as a new starting point for banks. It is time for you to support wealth creators and job creators. There is a need for banks to improve the country’s balance sheet, along with their own balance sheet,” Modi said at a conference on Creating Synergies for Seamless Credit Flow and Economic Growth.

He exhorted banks to fund corporates and start-ups. He said the scale at which corporates and start-ups are coming forward today is “unprecedented”. 

“In such a situation, what can be a better time to strengthen, fund, and invest in India’s aspirations?” he asked.

The banking sector will have to understand that this is the time to invest in ideas and support start-ups, he said.

“Whether public or private banks, the amount they invest in citizens will help in creating jobs,” he said.

He asked banks to get involved in the growth story proactively.

“Under the production-linked scheme, manufacturers have been incentivised to increase their capacity manifold and transform themselves into global companies. Banks can play a big role in making projects viable through their support and expertise,” he said.

Modi also said the government has addressed the issue of NPAs, recapitalised banks, and strengthened them.

“We brought reforms like the Insolvency and Bankruptcy Code, reformed many laws, and empowered the debt recovery tribunal,” he said.

Resolution and recovery are taking place, and banks have managed to recover more than Rs 5 trillion from defaulters.

The new National Asset Reconstruction Company will also help banks in resolving bad loans of Rs 2 trillion, he added. 

He nudged bankers to come up with customised products by analysing the needs of customers. Banks need to adopt partnership models, set targets at the branch level, and customise solutions for customers, companies, and micro, small and medium enterprises.

“Banks have to do away with the feeling they are the approver and the customer an applicant, they are the giver and client receiver,” he said, addressing bankers.

Modi also said by August 15, 2022, all bank branches should target to have at least 100 top clients who undertake all their transactions digitally.

At the two-day dialogue between government ministries, industry, and bankers, it has been decided to create a web-based project funding tracker, he said. He added his suggestion was to integrate this with the Gati Shakti portal.

Providing comfort to bankers, Modi said he would stand beside them if honest decisions taken with true intentions go wrong.