India needs major banks to meet economic shift: Finance Minister

As the economy shifts to a different plane altogether, India will require more large lenders, such as the State Bank of India (SBI), said Finance Minister Nirmala Sitharaman on Sunday, keeping the government's message that Covid-19 vaccinations are leading to national recovery. Sitharaman told the Indian Banks' Association (IBA) in Mumbai that they need to scale up banking to meet changing needs in light of recent economic and industry realities. Sitharaman said that many new challenges have arisen as a result of the economy's shift to a different plane and the way the industry is adapting. It became clear that India requires not only more, but also larger banks. Four or five additional banks, such as the State Bank of India (SBI), are required in India . In light of the recent shifting realities of the economy and industry, they need to scale up banking to meet changing requirements. The National Asset Reconstruction Company Limited (NARCL), which received cabinet approval 10 days ago, is not a bad bank. Nirmala Sitharaman, the Finance Minister, announced on Thursday a formal government guarantee on the securities receipts that the planned bad bank will issue to banks as it takes on non-performing assets from their books. Sitharaman informed that the government will provide a guarantee of Rs 30,600 crore. In Budget 2021-22, the Finance Minister said that the high level of provisioning by public sector banks for their stressed assets necessitates measures to clean up the bank books. The warranty will last for five years. Image SourceAlso read: Govt draws roadmap to make India a $1 trillion digital economy