New Delhi: Prime Minister Narendra Modi on Thursday said Indian banks have recovered over Rs. 5 trillion (Rs. Five lakh crore) out of the stressed loans stuck during the previous regimes.
“When someone runs away with bank loans, we discuss it a lot. But when a daring government brings them back, nobody discusses it. More than Rs 5 trillion have been recovered out of the lakhs and crores of rupees that were stuck during the previous governments’ regime,” he said while addressing bankers at a symposium on “Build Synergy for Seamless Credit Flow and Economic Growth,” organized by the Union Ministry of Finance.
The National Asset Reconstruction Co (NARCL), set up recently, would help resolve another Rs 2 trillion worth of stressed assets, he said. “Reforms in the last six-seven years have led to the banking sector in a powerful position today… We have addressed non-performing assets (NPAs) of banks, recapitalized banks, brought bankruptcy laws, and strengthened debt recovery tribunal.”
Emphasizing that the banking sector must take advantage of the major reforms and schemes and the enormous pool of data in the country, he exhorted banks to support wealth and job creators, and work proactively to improve the country’s balance sheet.
The banks should now adopt a partnership model to help businesses thrive and move away from the idea of being a loan “approver” to a loan “applicant”. “It is time that banks, along with their own balance sheets, help increase the balance sheet of the country as well.”
Modi urged bankers to offer “customized solutions” to businesses and micro, small and medium enterprises (MSMEs). “Don’t wait for customers to come to banks. Go to them,” he said.
Remarking that banks have adequate liquidity and non-performing loans are the lowest in five years, the PM said, despite the Covid-19 pandemic, the banking sector remained strong in the first half (April-September) of 2021-22. This has led to an upgrade in sector outlook by international agencies.
“The scale at which corporates and start-ups are coming forward today is unprecedented. In such a situation, what can be a better time to strengthen, fund, invest in India’s aspirations? Today, when the country works so hard on financial inclusion, it is very important to unlock the productive potential of the citizens,” he observed.
Referring to a banking sector research, Modi said that states with more Jan Dhan accounts have seen relatively lower rates of crime.
Citing the Production-Linked Incentive (PLI) scheme, he said the manufacturers should increase their capacity manifold to transform themselves into global companies.
About the reforms the Centre has ushered in to improve the financial health of banks, the PM said these would support and strengthen the sector.
“The banks’ financial health is in a much better position now.”
(VP)
