Prime Minister Narendra Modi asked banks and non-banking financial companies (NBFCs) to encourage small entrepreneurs, self-help groups (SHGs) and farmers to opt for institutional credit. He was talking to stakeholders from the banking sector about the crucial role financial and banking system play in supporting India's growth.
Each bank needs to introspect and take a relook at its practices to ensure stable credit growth, the Prime Minister said. Banks should not treat all proposals with the same yardstick and should identify bankable proposals to ensure that they get access to funding on their merit and don't suffer due to past NPAs, he further added.
During the meeting, PM Modi emphasised that the government was firmly behind banks and NBFCs, and is ready to support them and promote their growth.
PM Modi also took stock of schemes including Emergency Credit Line Guarantee Scheme for MSMEs, additional Kisan Credit Cards, and liquidity window for NBFCs and microfinance institutions (MFIs). While it was noted that significant progress has been made in most schemes, banks need to be proactive and actively engage with the intended beneficiaries to ensure that the credit support reaches them in a timely manner during this period of crisis.
The Prime Minister stated that banks should adopt fintech like centralised data platforms, digital documentation and collaborative use of information to move towards digital acquisition of customers. This will help increase credit penetration, increase ease for customers, lower costs for banks and also reduce frauds, he said.
"India has built a robust, low-cost infrastructure which enables every Indian to undertake digital transactions of any size with great ease. Banks and financial institutions should actively promote the use of RUPAY and UPI amongst its customers," PM Modi told banking sector stakeholders.