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The Finance Minister, Mr Pranab Mukherjee, on Saturday asked public sector banks to tone up their credit delivery mechanisms so as to ensure that the targeted groups get the benefit of government policies.
Stating that Government policies are sometimes not implemented in “letter and spirit”, Mr Mukherjee said that delivery system must improve and financial inclusion was “absolutely necessary” to ensure that people get the benefit of economic growth.
“We must have inclusive growth. We must ensure that the benefits of growth reach the largest number of persons,” Mr Mukherjee said at an event to mark the 106th Foundation Day celebrations of Corporation Bank here on Saturday.
This could be achieved only through a strategy of new paradigm where people are empowered and empowerment is followed by entitlement and entitlement must be backed by legal enactment, he said.
While the Government had already come up with legal enactments to ensure Right to Information, right for jobs and right to education, it will soon take steps to ensure right for food, Mr Mukherjee said.
The Finance Minister said that financial inclusion was an important priority of the Government as only 38 per cent (32,919) of the 87,051 bank branches of scheduled commercial banks are in rural areas. “Despite more than 40 years of bank nationalisation, we have not been able to establish more than 32,000 plus bank branches in rural India with 6 lakh villages,” he said, adding that performance has been good in the overall sense of expanding the branch network to 87,051 branches.
On the global economic situation, Mr Mukherjee said that there was recovery, but it was still fragile. “We are in extremely difficult and at the same time encouraging and challenging times. It is difficult and challenging in the sense that world is yet to recover from the worst international financial crisis after the great depression of 1930s,” he said. On agricultural credit, Mr Mukherjee expressed the confidence that the current fiscal's target of Rs 3.75 lakh crore would be surpassed. He said that the banking system had already provided nearly Rs 3 lakh crore credit as on end December 2010.
“The target of credit flow to the farmers has been raised to Rs 4.75 lakh crore in 2011-12. Banks have been asked to step up direct lending for agriculture and credit to small and marginal farmers. I do hope that bankers would come to the expectations of the poor farmers,”Mr Mukherjee said.
On the occasion of Corporation Bank's 106th Foundation Day, the Finance Minister inaugurated from New Delhi the bank's heritage museum and Financial Research Centre at Udupi.
Speaking at the event, the Union Law Minister, Mr Veerappa Moily, said that banks need to promote entrepreneurs, particularly in rural India.
He also suggested that banks need to look at moving away from collateral based lending to rural entrepreneurs.
Meanwhile, Mr Ramnath Pradeep, Chairman and Managing Director of Corporation Bank, told Business Line that the Government has agreed to infuse Rs 309 crore into the bank, taking the Centre's stake in the bank to little over 58 per cent.
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