English rendering of PM’s address at conference on Creating Synergies for Seamless Credit Flow and Economic Growth

Namaskar!

Finance Minister of the country Smt. Nirmala Sitharaman ji, Ministers of State for Finance Shri Pankaj Choudhary ji and Dr. Bhagwat Karad ji, RBI Governor Shri Shaktikanta Das ji, stalwarts of the banking sector, respected colleagues of the Indian industry, all other dignitaries associated with the program and ladies and gentlemen,

Ever since I came here and whatever I heard, I can feel a sense of belief all around. That is, our confidence level is so vibrant that it converts huge possibilities into resolutions and if everyone works together, I do not think that it will take us long to achieve those resolutions. There comes a time in the development journey of any country, when it takes new resolutions for a new leap and then the energy of the entire nation gets involved in achieving those resolutions. The freedom movement continued for a long time. Historians see 1857 as a fountainhead. But the Dandi Yatra in 1930 and the Quit India Movement in 1942 were the two turning points, which we can say, when the nation had decided to leapfrog. The upsurge in the 30’s created an atmosphere across the country. And the result of the second upsurge in ‘42 came in 1947.  The leap I am talking about is 75 years of independence and today we are at such a stage that the groundwork is strong and we simply have to work for the fixed targets to take this leap in the true sense. I said this from Red Fort on August 15 that this is the time and this is the right time.  All of you are the key stakeholders in this ‘mahayagya’ of nation building. Therefore, I think the roadmap that you envisaged and arrived at the decisions at the two-day discussions about future preparations is very important in itself.

Friends,

The banking sector of the country is in a very strong position today because of the reforms undertaken by the government in the last six-seven years and the support given to the banking sector in every way. You also agree that the financial health of the banks is now in a much improved condition. We have found ways to solve whatever problems and challenges were there before 2014. We addressed the problem of NPAs, recapitalized the banks and strengthened them. We brought reforms like IBC (Insolvency and Bankruptcy Code), improved many laws and strengthened the Debt Recovery Tribunal. A dedicated Stressed Asset Management Vertical was also formed in the country during the Corona period. As a result, the resolutions and recoveries of banks are getting better, the position of banks is getting stronger and one can see an inherent strength within them. The amount returned to the banks is also a reflection of the transparency and commitment of the government. There is a lot of discussion in our country when someone runs away with (the money) of the banks. However, there is no debate when a powerful government brings back (the money). More than five lakh crore rupees from willful defaulters during the previous governments have been recovered. The amount of five lakh crore rupees may not appear to be huge for people at your level. This was the perception then. I am sure people sitting here don’t entertain that perception. It is true that there was this perception that it is our banks and the (money) in the banks is also ours. It does not matter whether it (money) lies there or with me. Whatever was asked for was given.  It was not known (to them) that the nation would take an altogether different decision in 2014.  

Friends,

We have taken recourse to policies and laws in our attempt to get this money back. We have also used the diplomatic channel. The message is also very clear that there is only one option and that is to come back (to the country). This process is going on even today. With the formation of the National Asset Reconstruction Company and the government guarantee of more than Rs 30,000 crore, the stressed assets of about Rs 2 lakh crore are expected to be resolved soon. The consolidation of public sector banks has increased the efficacy of the entire banking sector and is also helping banks to raise funds from the market.

Friends,

All these steps and reforms have created a huge and strong capital base of the banks. Today banks have significant liquidity and there is no provision of backlog NPAs. NPAs of public sector banks are at the lowest in five years today.  The robustness of our banks in the first half of this financial year despite the Corona period has caught everyone’s attention. As a result, international agencies are also upgrading the outlook of India’s banking sector.

Friends,

Today the banks of India have become so powerful that they can play a big role in giving new energy and a big push to the country’s economy in making India self-reliant. I consider this phase to be a major milestone in the banking sector of India. You must have also seen that this milestone is also an indicator of our journey ahead in a way. I see this phase as a new starting point for the banks of India. It is time for you to support wealth creators and job creators in the country. The RBI Governor who just mentioned job creation and I think it’s the right time. Today the need of the hour is that the banks of India should work proactively to increase theirs as well as the country’s balance sheet. Don’t wait for the customer to come to your branch. You have to analyze the needs of the customers, companies and MSMEs and provide customized solutions to them. For example, two defence corridors are being built in Bundelkhand in ​​Uttar Pradesh and in Tamil Nadu. The government is speeding up things there. Have you ever held a meeting with the bank branches surrounding those corridors to find out what can banks do proactively regarding the defence corridor, a whole new sector of defence is coming up? What are the emerging possibilities following the defence corridor? Who all are the captains (of industries) who would (invest) in it? What are the MSMEs which will become part of this support system? What will be the approach of the banks? What will be the proactive approach? How will different banks compete? Who provides the best services? Only then, it will not take long to implement the Defence Corridor that the Government of India has envisioned. But the approach that the government has made a defence corridor, there is already been a well-settled clientele for 20 years, everything is doing fine, banks are also doing fine, it will not work.  

Friends,

You must shun the feeling that you are an approver and the person in front of you is an applicant. Banks must adopt the partnership model. For example, banks at branch level can decide to approach at least 10 new youths or local micro, small and medium enterprises in their vicinity to help promote their enterprises. I remember during my school days, banks were not nationalized and they would visit our school at least twice a year and explain the importance of opening bank accounts. There was also a competition among them to train the common man regarding the banking sector and the financial world. All banks have done this and maybe the approach has changed after nationalization. Recognizing the power of the banks, I called upon them in 2014 that I have to start the movement of Jan Dhan accounts, I have to go to the huts of the poor and open their bank accounts. The atmosphere of trust was not there when I would talk to my officers. There were apprehensions. I would tell them that there was a time when bankers used to come to schools. How can it be that there are only 40 percent people connected with the banks in such a vast country and 60 percent are outside its purview? The same people of the nationalized banks who had the habit of dealing with big industrialists only decided to open Jan Dhan accounts. Today I would like to proudly mention all the banks and their employees for realizing this dream and setting the Jan Dhan account as a great example in the world of financial inclusion. It has happened because of your efforts. I believe that because of the Prime Minister Jan Dhan mission, the seed of which was sown in 2014, India’s poor survived while the world staggered during this difficult period. It was the power of the Jan Dhan accounts. The virtue of this sacred work will go to the accounts of all those people who have worked hard to open Jan Dhan accounts by visiting the poor so that they don’t sleep hungry. No work or effort is ever wasted. Anything done with sincerity gives results over a period of time. We can see the great results of the Jan Dhan accounts. We do not envisage an economy which is strong at the top but it buries everything under its weight. We have to strengthen the banking system for the poorest of the poor so that when the economy grows, it helps both (the rich and the poor).  And I believe that we should proceed with that approach. You can imagine the boost to the confidence of local merchants when they realize that bank employees are standing by their side and are reaching out to them to help them. They will also benefit greatly from your banking experience.

Friends,

I know that it is very important for the health of the banking system that it invests money only in viable projects. But at the same time, we can also play a proactive role in making projects viable. There are not selected regions for viable projects. Our bank colleagues can do one more thing. You are very much aware of the economic potential in your area. You can increase the capacity of the loan if somebody is honestly returning the loan worth five crore rupees in time. You should make efforts to support him so that he develops the capacity to repay higher loans. You all are aware of the PLI scheme. The government is giving production incentives to the manufacturers so that they increase their capacity manifold and transform themselves into global companies. Today record investment is being made on infrastructure in India, but how many big infrastructure companies are there in India? Can we fulfill the dreams of the 21st century with last century’s infrastructure, skills and technology? It can’t be. Costly equipment will be required for the construction of huge buildings, large scale projects, bullet trains and expressways. It will require money. Why can’t there be eagerness among the people in the banking sector that they should have a client who should figure in the world’s top five? Will the prestige of the bank increase or not if the account of that infrastructure company which is among the world’s top five is there in your bank? Will it empower the country or not? We will have to see how many giants we can create in different fields. When one of our players wins a gold medal, the entire country finds itself in that golden era. This potential is there in every field. When any intelligent person or scientist from India wins the Nobel Prize, the entire country considers it to be its own. This is ownership.  Can’t we take the Indian banking sector to such heights? It will only benefit banks and there is no loss in it. 

Friends,

The banking sector must take advantage of the huge pool of data that has been created in the country following the big-ticket reforms and schemes in the last few years. Like if I talk about GST, today every trader’s transaction is done with transparency. Strong data is now available with the country about the capabilities of traders, their trading history and where their businesses are spread. Can’t our banks go to the traders themselves and lend them support on the basis of this data?  Encourage them to expand their business. They will expand to four other areas and give employment to 10 people. As I mentioned the Defence Corridor, I would also like to talk about the SVAMITVA scheme. I am sure my friends from the banking sector would have heard about it. Those who read international news are aware that the entire world is grappling with this issue of ownership. India has found a solution. Maybe we will have results soon. But what is this?  Today the government is mapping the properties through the use of technology and drones and handing over ownership papers of property to people in villages. They have been living there for ages, but they don’t have official documents of the properties. As a result, the house at best can be rented out. Otherwise, it does not have any value. Now that they have the ownership papers which have been given by the government, the banks are also assured. Now the banks will also be able to offer loans on the basis of these papers to the farmers, blacksmiths and those involved in handicrafts. It will now be safe for the banks to extend loans to the people and youth of the villages on the basis of ownership papers. But I would also like to say that banks themselves will have to come forward to support the people of the villages now that their financial security has increased. The investment in the agriculture sector is very low in our country. The investment by the corporate world in this field is almost negligible whereas there is a lot of potential for food processing and there is a huge market in the world. Many initiatives related to food processing industry, machinery related to agriculture, work related to solar are being undertaken and your help can change the picture of the villages. Similarly, SVANidhi scheme is another example. Our street vendors have been connected to the banking system for the first time under the Pradhan Mantri SVANidhi Yojana. Now the history of their digital transactions is also being readied. Taking advantage of this, the banks should come forward to help such colleagues. I have also requested the banks, the Urban Ministry and the mayors to teach these street vendors about digital transactions on mobile phones. He will do the purchase and sale of his goods digitally. This is not a difficult task. India has done it. On the basis of the history of his digital transactions, you can give him 50,000 rupees which can be extended to 80,000 rupees or 1.5 lakh rupees and his business will also expand. He will purchase more and sell more. If he is doing his business in one village, he will expand it to three villages in near future. 

Friends,

Today, when the country is working so hard on financial inclusion, it is very important to unlock the productive potential of the citizens. I’ve heard this word ‘unlocking’ three or four times here. Banking sector research has recently pointed out that the crime rates have come down drastically in the states where more Jan Dhan accounts have been opened. I was very pleased with the report. Never before banks had imagined that they would be acting as cops. An atmosphere of a healthy society is being created. If a Jan Dhan account brings someone out of the world of crime, what will be the greater virtue of life than this? What greater service to society could there be than this? In a way, when the doors of the banks opened for the people, it also affected the way of life of the people. Understanding this power of the banking sector, I think our colleagues in the banking sector should move forward. I know I am not speaking about those who are sitting here because the representatives who came here gave their point of view. I am representing others. Since, it will be carried out by those in the banking sector and, therefore, the central point of my speech is around the banking sector and its leaders. Be it public banks or private sector banks, the more we invest in citizens, the more new jobs will be created, the more will the youth of the country, women and the middle class benefit.

Friends,

The historical reforms that we have undertaken during the self-reliant India campaign have opened the doors of new possibilities in the country. The scale at which corporates and start-ups are coming forward today is unprecedented. What can be a better time to strengthen, fund, invest in India’s aspirations, friends? Our banking sector will have to understand that this is the era of investment on ideas and supporting start-ups. Idea is at the core of any start-up. 

Friends,

You have no shortage of resources. You have no shortage of data. Whatever reforms you wanted, the government has done it and will continue to do so. Now you have to move ahead by aligning yourself with national goals and national resolutions. As our secretary was just mentioning, it has been decided to create a web based project funding tracker in order to bring ministries and banks together. It is a good thing and it will lead to greater facilities. This is a good initiative. But I have a suggestion. Can’t it be better that we add this new initiative as an interface in the GatiShakti portal itself. India’s banking sector will move ahead with big thinking and innovative approaches in this virtuous period of independence.

Friends,

There is another topic and that is Fintech. If we delay further, we will be left behind. The power of the people of India to adopt everything new is very amazing. Today you must have seen that fruit sellers and vegetable sellers are asking you to make payments by scanning QR code. Put QR codes in temples and donations will be made digitally. In short, there is an environment regarding fintech everywhere. I want there should be an atmosphere of competition in the banks. Every bank branch should have top clients with 100% digital transactions. In other words, their entire business should run digitally. We have a very effective platform in the form of UPI. Why don’t we do it? What was the situation in our banking sector earlier? Clients used to come, take tokens and would carry cash. Then those currency notes were counted and verified again by somebody else. A lot of time was spent on finding out whether the currency notes were genuine or fake. A client would spend anything between 20 to 30 minutes in the bank. Today machines are counting currency notes and you are enjoying the fruits of technology. But still I am not able to understand the hesitancy towards digital transactions. This is an era to take a leap and fintech is a big track. In this Amrit Mahotsav of independence, I urge you that every bank branch should have at least 100 such clients with 100 percent digital transactions before 15th August, 2022. Then you will realize the change. You have realized the importance of Jan Dhan accounts. You will find a manifold increase in the power of these small potentials. I had the privilege of serving in a state for a long time. Every year, there used to be meetings with the banks and we would discuss future planning as well as resolving issues. The banks would often share their experiences with women self-help groups and would proudly say that they return the entire loan amount before the due date. When you have such a wonderful positive experience, do you have any proactive planning to give it a boost? The potential of our women self-help groups is so much that they can become a huge driving force of our economy at the grassroots level. I have spoken to so many people and came to know there are many modern systems of finance available in the market. It can become a great basis of the economic strength of the common citizen. I wish that there is an opportunity to take a leap with a new determination with this new approach. Groundwork is ready and I have told the banks at least 50 times that I am with you. Count my words and you can keep this video clip as a proof that I am with you and for you for any work done sincerely in the interest of the country. Sometimes mistakes happen while doing something for the benefit of the country with sincerity and honesty. If any such difficulty arises, I am ready to stand as a wall with you. But now we have to fulfill our responsibilities to take the country forward. When there is such a wonderful groundwork ready, boundless opportunities and possibilities of touching the sky are there, and if we spend our time only in thinking, then the coming generations will not forgive us.

Many best wishes to all of you!

Thanks!

DISCLAIMER: This is the approximate translation of PM’s speech. Original speech was delivered in Hindi.

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DS/BM