Public sector banks are going to launch new products in the next 3-4 months to increase lending to all sectors including MSMEs.
Public sector banks will unveil new products in the next few months to improve credit growth, Financial Services Secretary M Nagaraju said on Tuesday.
“We are really committed to scaling up, and we want to lend as much as possible because we have a large number of youth,” he said while addressing the Financial Inclusion and Fintech Summit organized by CII here.
Public sector banks are going to launch new products in the next 3-4 months to increase credit to all sectors, including MSMEs, he said.
Over the past few years, the government has already taken multiple steps to improve credit availability to small borrowers, including announcing a new credit model in the budget to lend to borrowers with no previous financial record.
Although the banking sector is strong, Nagaraju said growing digital fraud is posing a threat to the stability of the financial sector, and banks should focus on meeting this challenge.
Both digital innovations and financial literacy will help reduce this, he added.
Speaking on the sidelines, Nagaraju also said that the banking reform bill tabled in Parliament during the monsoon session will be moved to the ongoing winter session.
The amendment aims to bring about changes in banking regulations, including redefining substantial interest for directors, increasing the number of nominees for bank deposits and changing compliance reporting dates.
Speaking on fintech, he said that India is the third largest country in terms of startups, and there are around 13,000 such organizations operating in the space.
The government is committed to the goal of financial inclusion and is working closely with the fintech industry to achieve greater inclusion, especially in under-penetrated areas.
“The government is making a lot of efforts to promote ease of doing business and reduce the compliance burden for fintech companies,” he noted.
He underlined the government’s continued efforts to provide an enabling ecosystem for the fintech industry, including strong digital infrastructure and schemes like PM Suraksha Bima Yojana and Atal Pension Yojana, which could bring huge opportunities for the industry.
“A fine balance is needed between encouraging innovation and protecting the integrity of the regulatory system,” he warned.
Speaking on the occasion, NABARD Chairman Shaji KV emphasized the need to bring about technological change in a more democratic manner, especially in the rural economy.
Shaji added that while large banks have benefited from greater digitization, cooperative banks and regional rural banks have not benefited from digitization to the same extent.
Given that these banks may not have sufficient funds to invest in new technologies, it is important that all stakeholders make more efforts to involve RRBs and cooperative banks in new digital efforts, he said.
In this regard, he recommended that fintech companies can take advantage of recently announced government schemes to bring about enhanced growth equity in the country.