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Many districts lack banking presence; country needs 4-5 more SBI sized big banks: FM Sitharaman

Many districts lack banking presence; country needs 4-5 more SBI sized big banks: FM Sitharaman

Addressing the 74th Annual General Meeting of Indian Banks' Association, FM Sitharaman stated that India needs many more banks and a lot more large sized ones to serve the growing needs of the country

Union Finance Minister Nirmala Sitharaman added that there was a pressing need to ramp up banking to meet the growing needs of the industry Union Finance Minister Nirmala Sitharaman added that there was a pressing need to ramp up banking to meet the growing needs of the industry

Union Finance Minister Nirmala Sitharaman said on Sunday that several districts across the country lack banking presence despite the high level of economic activity happening in those areas.

Addressing the 74th Annual General Meeting of the banking industry lobby grouping Indian Banks' Association, FM Sitharaman stated that India needs many more banks and a lot more large-sized ones to serve the growing needs of the country in order to make a smart recovery after COVID-19 pandemic-led disruptions.

She further asked the lenders to amplify efforts of deepening their presence in the country.

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The finance minister added that there was a pressing need to ramp up banking to meet the growing needs of the industry and also to ensure that all economic centres of the country are secured with at least one physical or digital banking presence.

"We need to scale up banking. The need is for at least four-five more SBI sized banks," FM Sitharaman said. She added that the amalgamation exercise among public sector banks (PSBs) has aided the government in forging ahead with the creation of large banks.

Giving the lenders the option to decide which place requires banking presence through a brick-and-mortar model and where a step-down presence would help, Sitharaman made it clear that she is not against digitalisation and efforts.

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She said the banks'' books are much cleaner now and this will help the government as the recapitalisation requirements go down.

The finance minister also said the upcoming National Asset Reconstruction Company should not be called a "bad bank" as it is called in the US.

Banks need to be nimble and understand every unit's need to achieve the $400 billion exports target, she noted.