Finance Minister Pranab Mukherjee has said banking sector needs to support growth trajectory heading towards 9 percent or more in the coming years in the economy while giving due attention to the asset quality and prudent provisioning to balance emerging returns and risks.
With regard to financial inclusion, the Finance Minister asked all the banks to step up their efforts towards financial inclusion using the instrument scale neutral technology as this would help in bringing the vast population into the ambit of formal finance and also boost future economic growth coupled with equity.
"India with growth trajectory heading towards 9 percent or more in the coming years is placed at a critical juncture. Banking sector needs to support this growth momentum. Though the Indian banks could emerge from the global financial crisis in relatively good health, challenges still remain," he said.
There was a decline in the profitability of Indian banks in 2009-10 in terms of all the major indicators, he added.
"The asset quality of banks deteriorated and the coverage ratio of provisions showed a fall at the aggregate level reflecting a weakening cushion to meet NPA losses. Therefore, the Minister said that the banks need to give due attention to the asset quality management and prudent provisioning."
Mukherjee, however, commended Union Bank of India for transforming itself into a modern bank by leveraging on technology and adapting to the changing needs and opportunities, ensuring appreciable growth in its business from just 500 billion rupees to 3 trillion rupees during this decade.
He appreciated the new initiatives taken in regards with financial inclusion by Union Bank of India in this field. Mukherjee also expressed his pleasure as the Bank achieved 100 percent core banking in its Regional Rural Banks and released the two million biometric cards under its financial inclusion plan.
Mukherjee released a book while addressing the senior officers and employees of the Union Bank of India and other dignitaries present on the occasion of 92nd Foundation Day of Union Bank of India (UBI). The book titled “Beacons’ Bank”, which is a story about Union Bank of India written by M.V. Kamath.