Finance Ministry asks PSBs to seek ideas from branches to achieve USD 5 trillion economy

New Delhi, PTI | Updated : 17 August 2019, 07:18 AM
Finance Minister Nirmala Sitharaman (File Photo)
Finance Minister Nirmala Sitharaman (File Photo)

The finance ministry has asked public sector banks (PSBs) to initiate a month-long consultation process with officers starting from branch level to seek suggestions for achieving a USD 5-trillion economy in five years. The suggestions emanating from a month-long campaign beginning Saturday will be used as inputs to prepare a road map for the future growth of the banking sector.

According to a communication by the ministry to the heads of PSBs, it will be a bottom-up consultative process from the branch level onwards which will involve discussions at the branch or regional level, state level and national level.

The consultation process is aimed at aligning the banking sector with national priorities, stimulating ideas and inculcating a sense of involvement among bankers at the branch level, it said. The campaign envisages not only performance review but synchronisation of banking with region-specific issues and their growth potential.

READ | USD 5 trillion economy target achievable: PM Modi from Red Fort

It also aims to find out role of PSBs as active partners in the Indian growth story for the next five years. The country has set a goal of achieving a USD 5-trillion economy by 2024-25. It will also find solution for enhanced ease of living making banks more responsive to customers and challenges before banks and their preparedness in areas such as cybersecurity and data analytics.

There will be focus on raising credit offtake for supporting economic growth credit support to infrastructure and role of the banking sector in doubling farmers' income and water conservation. Besides, supporting for green economy, improving education loan and other sectors such as micro, small and medium enterprises (MSMEs) and exports.

In addition, there will be focus on pushing digital economy and financial inclusion, it said. The consultative process will be divided into three stages with the first being at the branch or regional level, followed by the state level. It will culminate with a national-level two-day brainstorming in Delhi. The campaign comes at a time when the economy is facing headwind and it has slowed to a 5-year low of 6.8 per cent.

READ | Maruti Suzuki India cuts over 3,000 jobs, cites economic slowdown as reason

There are ominous signs showing that slowdown may be deep. The automobile sector is facing its worst crisis in two decades and reports suggest thousands of job losses in the auto and ancillary industry. In the real estate sector, the number of unsold homes has increased, while fast-moving consumer goods (FMCG) companies have reported a decline in volume growth in the first quarter.

Though lending by banks to industries has shown a significant jump from 0.9 per cent in the June 2018 quarter to 6.6 per cent in the corresponding period this year, the same to job-creating MSME sector has slipped from 0.7 per cent to 0.6 per cent during the same period. However, silver lining amid gloom is improvement in non-performing assets of the banks.

Last month, Finance Minister Nirmala Sitharaman told Parliament that total bad loans of commercial banks declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore in 2018-19, on the back of steps taken by the government.

First Published: Saturday, August 17, 2019 07:15 AM
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