Envisage Changes In Banking Due To Fin-Techs: PM

“RBI is the appropriate body for the holistic appreciation of the banking vision of Viksit Bharat: Prime Minister Narendra Modi; Indian Banking System Seen As Strong, Sustainable

PM attends the commemoration ceremony of 90 years of the Reserve Bank of India at Mumbai, in Maharashtra on April 01, 2024.

PM Narendra Modi released a commemorative coin to mark 90 years of RBI on Monday in Mumbai

FinTech BizNews Service  

Mumbai, 01 APRIL 2024: The Prime Minister, Shri Narendra Modi addressed the opening ceremony of RBI@90, a program marking 90 years of the Reserve Bank of India, in Mumbai, Maharashtra today. Shri Modi also released a commemorative coin to mark 90 years of RBI. The Reserve Bank of India (RBI) commenced its operations on the 1st of April in 1935 and enters its 90th year today.

Addressing the occasion, the Prime Minister said that the Reserve Bank of India has reached a historic landmark today completing 90 years of existence. He underlined that the RBI has witnessed both the pre and post-independence eras and it has created an identity around the world based on its professionalism and commitment. The Prime Minister congratulated all staff on the completion of 90 years of the RBI. Deeming the present RBI staff as fortunate, the Prime Minister said that the policies drafted today will shape the next decade of RBI and noted that the next 10 years will take RBI to its centenary year. “The next decade is extremely important for the resolutions of a Viksit Bharat”, PM Modi said, highlighting the RBI’s priority towards fast-paced growth and focus on trust and stability. The Prime Minister also conveyed his best wishes for the fulfilment of its goals and resolutions.

Emphasizing the importance of coordination of monetary and fiscal policies in the GDP and the economy of the country, the Prime Minister recalled the 80-year celebration of RBI in 2014 and remembered the challenges and problems like NPA and stability faced by the banking system of the country at that time. He said that starting from there, today we have reached a point where the Indian banking system is being seen as a strong and sustainable banking system of the world as the near moribund banking system of that time is now in profit and showing record credit.

The Prime Minister credited clarity of policy, intentions and decisions for this transformation. “Where intentions are right, results too are correct”, said the Prime Minister. Speaking on the comprehensive nature of reforms, the Prime Minister stated that the government worked on the strategy of recognition, resolution and recapitalization. A capital infusion of 3.5 lakh crore was undertaken for the helping public sector banks along with many governance-related reforms. Just the Insolvency and Bankruptcy Code has resolved loans amounting to 3.25 lakh rupees, the Prime Minister pointed out. He also informed the country that more than 27,000 applications involving underlying defaults of more than Rs 9 lakh crore were resolved even before admission under IBC. Gross NPAs of banks that stood at 11.25 percent in 2018 came down to below 3 percent by September 2023. He said that the problem of twin balance sheets is a problem of the past. PM Modi complimented RBI for their contribution to this transformation.

Prime Minister Modi pointed out that even though the discussions related to the RBI are often limited to financial definitions and complex terminologies, the work carried out at RBI directly makes an impact on the lives of common citizens. In the last 10 years, the Prime Minister said that the government has highlighted the connect between the central banks, banking systems and beneficiaries at the last queue and gave the example of financial inclusion of the poor. He mentioned that 55 percent of the 52 crore Jan Dhan accounts in the country belong to women. He also mentioned the impact of financial inclusion in the agriculture and fisheries sector where more than 7 crore farmers, fishermen and cattle owners have access to PM Kisan Credit Cards providing a significant push to the rural economy. Referring to the boost for the cooperative sector in the past 10 years, the Prime Minister threw light on the importance of regulations of the Reserve Bank of India regarding cooperative banks. He also mentioned more than 1200 crore monthly transactions via UPI making it a globally recognized platform. The Prime Minister also touched upon the work being done on Central Bank Digital Currency and said that the transformations of the past 10 years have enabled the creation of a new banking system, economy and currency experience.

The Prime Minister emphasized the importance of clarity for the targets of the next 10 years. He pointed out the importance of keeping an eye on the changes brought about by the cashless economy while promoting digital transactions. He also stressed the need for deepening financial inclusion and empowerment processes.

Stressing the diverse banking needs of a large country like India, the Prime Minister underlined the need to improve ‘ease of doing banking’ and provide tailor-made services as per the needs of the citizens. He underscored the role of artificial intelligence and machine learning.

He highlighted the role of RBI in speedy and sustainable growth of the country. Noting the achievement of RBI in infusing rule-based discipline and fiscally prudent policies in the banking sector, the Prime Minister also asked for advance estimation of the needs of various sectors to take proactive steps while assuring the banks of government’s support. The Prime Minister also mentioned inflation-controlling measures like giving the right of inflation targeting to the RBI and praised the performance of the Monetary Policy Committee in this regard. Steps like active price monitoring and fiscal consolidation kept inflation at a moderate level even during difficult times of Corona.

“Nobody can stop a country from progressing if its priorities are clear”, the Prime Minister emphasized. He gave the example of the government giving heed to financial prudence and prioritizing the lives of common citizens during the covid pandemic which led to the poor and middle class emerging out of the adversity and giving momentum to the country’s growth today. “The Indian economy is creating new records at a time when many countries in the world are still trying to recover from the economic shock of the pandemic”, the Prime Minister said. He underlined the role of RBI in taking India’s successes to the global level. Highlighting the importance of creating a balance between inflation control and growth for any developing country, PM Modi expressed confidence that RBI can become a model for this and play a leadership role in the world, thereby supporting the entire global south region.

Noting that India is the most youthful nation in the world today, the Prime Minister touched upon RBI playing a critical role in fulfilling the aspirations of the youth. He credited the policies of the government in the opening up of new sectors in the country thereby creating numerous opportunities for the youth of today. He gave the example of the expansion of the green energy sectors and mentioned solar energy, green hydrogen and ethanol blending. He also touched upon indigenously made 5G technology and rising exports in the defence sector. Speaking about MSMEs becoming a backbone of India’s manufacturing sector, the Prime Minister highlighted the implementation of the Credit Guarantee Scheme during the covid pandemic to support MSMEs. He stressed the RBI come up with out-of-the-box policies to ensure credit availability for the youth associated with the new sectors.

Stressing the importance of innovation in the 21st century, the Prime Minister asked to be prepared for the proposals that will come with regard to cutting-edge technologies with teams and identification of personnel for the task. He asked the bankers and regulators to be ready for the needs of new and traditional sectors like space and tourism.  He mentioned the expert view that in the coming years, Ayodhya is going to become the biggest religious tourism center in the world.

The Prime Minister credited the work done by the government for financial inclusion and digital payments which has created transparency in the financial capacity of small businesses and street vendors. “This information must be used to financially empower them”, PM Modi stressed.

PM Modi also stressed increasing the economic self-reliance of India in the next 10 years so that the impact of global issues is mitigated. “Today, India is becoming the engine of global growth with 15 percent share in global GDP growth”, Shri Modi remarked. He emphasized the efforts to make Rupee more accessible and acceptable throughout the world. He also touched upon the rising trends of excessive economic expansion and increasing debt and pointed out the private sector debt of many countries has doubled their GDP. Debt levels of many countries are also creating a negative impact on the world, he said. The Prime Minister suggested RBI conduct a study on this keeping in mind the prospects and potential of India's growth.

PM Modi underlined the importance of a strong Banking industry for providing required funding to the projects of the nation. He noted the changes brought about by technologies like AI and BlockChain and noted the importance of cyber security in the growing digital banking system. He asked the audience to think about the required changes in the structure of the banking system in light of fin-tech innovation as new financing, operating and business models will be needed. “Meeting the credit needs of global champions to street vendors, of the cutting edge sectors to traditional ones is critical for Viksit Bharat and RBI is the appropriate body for the holistic appreciation of the banking vision of Viksit Bharat”, the Prime Minister concluded.

Governor of Maharashtra, Shri Ramesh Bains, Chief Minister of Maharashtra, Eknath Shinde, Deputy Chief Ministers Devendra Fadanvis and Ajit Pawar, Union Finance Minister Smt Nirmala Sitharaman, Ministers of State for Finance Bhagwat Kishanrao Karad and Pankaj Chaudhary, and RBI Governor Shaktikanta Das were present on the occasion.

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