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Huge progress by banking system in 4 years supported India’s economy: NITI Aayog VC


New Delhi, NITI Aayog Vice Chairman Rajiv Kumar said tremendous progress made by the banking system in the past four years provided a strong foundation for a long runway for expanding credit and supporting accelerating growth of India’s economy. 'There was still a lot of work to be done in improving the financial system and furthering reforms in the financial sector,' Dr Kumar said at a conference on “The Future of Indian Banking” on Friday. The conference aimed to increase and elevate the discourse on the banking sector in India, and help develop insights to inform the continued evolution of the Indian banking sector for optimally supporting the growing credit needs of the Indian economy. The other key messages from the deliberations maintained that technology has become critically important for banking already and will continue to become more important in future. This will serve to bring banking closer to the customer, including those in rural areas, and also bring tremendous efficiencies with greater speed of service at much lower cost. Appropriate skilling of banking human resources is necessary to keep pace with best credit practices and new technology-based banking paradigm. In addition, banking staff needs to be trained to prepare for a larger role of banking in expanding the Indian economy. The banking industry has to be continuously prepared for fraud and rising cyber security risks.The deliberations also maintained that the banking industry requires a suitable vigilance mechanism for trustworthy banking but with a clear mandate to distinguish between deliberate action, criminal negligence, error in judgment or unforeseeable business risk.There may be a need to think again in terms of specialised and sector based banking. Public sector banks have consistently supported social banking, unlike private and foreign banks and they should continue to do so. To compete effectively globally there is a need for bigger banks in India, it was observed.There is a need for more research on banking sector issues, specific to the Indian context, panelists stressed. The event hosted over 200 domestic and international participants, including policy makers, academicians, researchers, professionals, and students from various banks, universities and institutes. The eminent speakers included Dr Kumar, Department of Financial Services Secretary Rajiv Kumar, CEA Dr K V Subramanian, IMF Senior Resident Representative Dr Andreas Bauer, Lead Financial Sector Specialist of World Bank Dr Marius Vismantas and Punjab National Bank MD Sunil Mehta among others. NITI Aayog co-hosted the conference with Foundation for Economic Growth and Welfare (EGROW Foundation), according to a statement here on Saturday.

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