Public Sector Banks lifeline of Indian economy : Jaitley

Speed Post News Network

New Delhi : Union Finance & Corporate Affairs Minister Arun Jaitley on February 28, 2019, said the Public Sector Banks (PSBs) are the lifeline of Indian economy. If their health is not good, then economy at large will also suffer, he said. Jaitley was speaking at the Conference on ‘Reforms Journey for EASE in Public Sector Banks (PSBs)” organised by the Indian Banks’ Association (IBA) here.

Talking about the reforms of Public Sector Banks (PSBs), Jaitley said that culmination of reforms was long overdue in the banking system. He said that some reforms are born-out of compulsion while there are many others which are born-out of conviction. He admitted that for the Government, it was a combination of both. The growth of our economy depends on PSBs ability to flow credit to the market and maintain sufficient liquidity. If that doesn’t happen, the economy as a whole will shrink. To keep economy in good health, PSBs are simply necessary.

The Finance Minister said that the worst in banking system is now behind us. Our fast growing economy needs to develop into a developed society and to do that, it is imperative that we must also be an ethical society. Jaitley said with conviction that in evolution of India into a more ethical society, the last five years will go down in history as a turning point.

Talking about the success of Insolvency & Bankruptcy Code (IBC), Jaitley said that everybody concedes that IBC is a success story. It has brought back close to Rs 3 lakh crore back into the banking system. All institutions have played a role in the success of the IBC. He attributed the IBC success to the Government keeping an arm’s length distance from the processes which various institutions and Committee of Creditors and others follow and allow their decision to be guided by merit and highest quality of professionalism.

On the issue of Non-Performing Assets (NPA), Jaitley said that for the last two or three quarters, the NPA curve is going down. The NPA didn’t go-up because banks made some strong decisions in the recent past. The NPA went-up because of truthful disclosure. There was no hiding under the carpet any more. Jaitley expressed happiness over the fact that several banks were recently-out of the Prompt Corrective Action (PCA) norms.

Earlier, giving an overview of the financial sector, Rajeev Kumar, Secretary, Department of Financial Services (DFS), Ministry of Finance, said that the entire banking system has been rebooted in the last few years. A system had to be developed to measure each bank on the Reform Agenda. Kumar said that Gross Non-Performing Assets (GNPA) has already reduced to Rs 31,000 crore. Simultaneously, close to Rs 2.87 lakh crore have been recovered by the PSBs of which Rs 98,493 crore have been recovered in first three quarters of 2018-19, he said, according to a PIB release.

Jaitley gave away the awards in various categories to the best performing PSBs at the conference.