Reforms in last 6-7 years has led banking sector to become strong today: PM Modi

Prime Minister Narendra Modi on Thursday said that the government has supported the banking sector in every way and added that this sector is very strong now. He said that the reforms in the last 6-7 years have led to the banking sector in a strong position today.

Addressing the conference on ‘Creating Synergies for Seamless Credit Flow and Economic Growth’, the prime minister said that banks are reflecting an inherent strength today. He said that the financial health of the banks have improved considerably as they have been recovering bad debt.

Modi said that over Rs 5 lakh crore bad loans have been recovered. He further added that his government has addressed every banking challenge with solutions like NPAs and bank recapitalisation. He said that banks now have adequate liquidity and no overhang of NPAs.

The prime minister said that his government brought bankruptcy laws and strengthened the debt recovery tribunal. He said that Rs 2 lakh crore of stressed assets are expected to be resolved through the National Asset Reconstruction Company.

He added that despite the Covid-19 pandemic, India’s banking sector has remained strong in the first half (April-September) in the ongoing financial year. This has led to an upgrade in sector outlook by international agencies.

Modi said that banks now have to adopt a partnership model to help businesses thrive and move away from the idea of being a loan “approver” to a loan “applicant”.

“Banks have to support wealth creators and job creators… It is time that banks, along with their own balance sheets, help increase the balance sheet of the country,” Modi said.

He nudged bankers to offer “customised solutions” to businesses and micro, small and medium enterprises (MSMEs). “Don’t wait for customers to come to banks. You have to go to them,” he said.