Finance Minister Nirmala Sitharaman on Monday urged banks to be more customer friendly in order to support entrepreneurs.
“Banks will have to be a lot more customer friendly. It should not to the extent of taking adverse risks you don’t need to take but you need to be a lot more friendly to the customers. This is an area which is so interesting and critical,” she said at the post Budget meet with industry representatives.
The finance minister was responding to a question on hassle free loans to women entrepreneurs.
She noted that Prime Minister Narendra Modi has said that he is the security and backing for loans in schemes such as MUDRA and SVANIDHI.
Revenue Secretary Tarun Bajaj also urged State Bank of India Chairman Dinesh Khara to take lead in working out a system to push credit into the economy.
“The balance sheets of both banks and corporate sector have started looking up. We want our growth rate to be high in coming years so that we can help the economy,” he said while requesting Khara to take the leadership as SBI Chairman on the issue so that in the next two to three years, there is adequate support to entrepreneurs, MSMEs and large businesses.
Digitisation
The SBI Chairman said the bank is making processes end-to-end digital so that loan processing from filing of application to decision-making is digital. It should be ready in about two months, he further said.
“Normally, it is perceived that banks don’t sanction the loan. In one quarter, the underutilisation of working capital has come down by 900 basis points,” he further noted.
Noting that hassle free is the way forward, Khara expressed confidence that with access to credible cash flow, lending to SMEs will also see a sharp growth, just like retail lending where there is access to credible bureau scores.
“When it comes to SME, best way out is credible cash flow. If we have access to credible cash flow, lending becomes easy,” he said, adding that retail loans have registered a 6-8 per cent per annum CAGR growth on the back of credible bureau scores.
He said the ecosystem has also undergone a change with definite improvement in behaviour of borrower and more responsible borrowing.
Blockchain technology
Meanwhile, responding to a question, Finance Secretary TV Somanathan said the government’s attitude towards blockchain technology is different from that to crypto assets.
“The government’s policy towards blockchain has nothing to do with policy towards crypto assets or virtual digital assets. There need not be any apprehension whatsoever regarding use of blockchain in an area which has nothing to do with payments or currencies,” he stressed.
Blockchain is an important technology and the government is in no way discouraging it, he said. He pointed out that the Coffee Board of India has launched a blockchain system for identifying specific varieties of coffee and the RBI digital currency itself will also be based on a version of blockchain technology.
Infrastructure push
In her opening remarks, Sitharaman said the Union Budget 2022-23, which comes at a time when economy coming out of pandemic, is focussing on sustained and strong recovery.
“We have hence tried balancing the focus on growth and sustained recovery; continuing with the story of investing in public infrastructure building,” she said, adding that the Budget has chosen spending on infrastructure as the more favourable route to ensure greater multiplier effect, which will also result in asset creation which can last for several years.
The minister also asked industry representatives for their views on the reasons for the decline of women participation in the workforce and measures that can be taken.
Financial markets
Sithraman, who is on a two-day visit to Mumbai, also met leaders of the capital markets, and asked them to explore ways to further strengthen the sector, said an official statement.
“The minister emphasised that trust and confidence in the financial markets are critical to gain traction amongst investors,” it said, adding that she also highlighted the role of market participants in institution-building and for making markets stronger and investor-friendly.