The country cannot afford to grow below eight per cent and must find innovative solutions to exit the current slowdown, Finance Minister P. Chidambaram said.
Addressing a gathering of top bankers at the annual Bancon summit here, Chidambaram said, “For India, eight per cent growth is not an aspiration, but an imperative.”
BANKS TO LEAD
He urged banks to focus on adding new customers, find new ways to do business and build new business models.
The finance minister said that there are new customers, borrowers as well as depositors, and it is the bank’s duty to seek them.
He said evidence suggests that farmers, women (who have organised themselves into self-help groups) and students have been very good customers for banks.
Pointing out that over one half of India has no access to banking, he urged the banks to make use of ultra-small branches and business correspondents to take banking to un-banked regions of the country.
“Everyone who has a genuine need and capacity to repay the loan must get loans. That can only happen with financial inclusion,” Chidambaram said.
The finance minister said that most people want to borrow small amounts of money.
“This is an area in banking business that has not yet been served adequately by banks. That need today is being serviced by other financial institutions,” he said.
He called on the bankers to encourage their young managers to come up with innovative products.
He also said that if Indian Banks’ Association institutes an award to reward the three most innovative banking products in a year, it will get full support from the government.