Direct cash transfer system a ‘pure magic’
India needs a ‘world size’ bank to be globally competitive and there is a need for consolidation in the banking system, said Finance Minister P. Chidambaram.
India has local cooperatives to national players. But while China has three of the world’s 20 largest banks, India has none. There is a need for consolidation, he said addressing a book release function of IOB @ 75 – the saga of good people to grow with.
Whether the century-old Central Bank of India; or State Bank of Bikaner celebrating its Golden Jubilee or Indian Overseas Bank in its 75th year – functions he had participated since yesterday, a common thread across these events was their Founders’ vision for a healthy financial system and banks, he said.
IOB’s Founder M.Ct.M. Chidambaram Chettyar had set up one of the first three branches overseas in Rangoon (now Yangon, Myanmar) recognising the importance of overseas trade, open economy and currency and exchange.
The Centre is committed to further strengthening the banking system and will infuse over Rs 15,000 crore new capital before March 2013. In the next 5-10 years, over Rs 1 lakh crore will be needed and the Government will find ways to do it.
Chidambaram urged the banks to fully cooperate in making the unique identity based Direct Benefit Transfer scheme, which envisages cash transfer to beneficiaries of development schemes.
“It is pure magic”. The way technology will help beneficiaries get the cash support the instant a Ministry or Department ‘signs off’ on a scheme. The unique identity platform envisaged in India is unparalleled globally with 1.25 billion people identified using biometric system.
The Government “looks to the banks to deliver on the promise it has made to the people,” Chidambaram said.
Beginning from January 1, in specific districts covering select schemes, it will be rolled out countrywide for all schemes by the year end. “All of next year, I will devote hours every day to ensure banks make the direct transfer of benefits a success,” he said.