Public Sector Banks are lifeline of Indian economy, says Jaitley

The Union Minister of Finance & Corporate Affairs,  Arun Jaitley said the Public Sector Banks (PSBs) are the lifeline of Indian economy. He said that if their health is not good, then economy at large will also suffer. The Finance Minister, was speaking at the Conference on ‘Reforms Journey for EASE in Public Sector Banks (PSBs)” which was organised by the Indian Banks’ Association (IBA), in New Delhi today.

Talking about the reforms of Public Sector Banks (PSBs), he said that culmination of reforms was long overdue in the banking system. Shri Jaitley said that some reforms are born-out of compulsion while there are many others which are born-out of conviction. He admitted that for the Government, it was a combination of both.

The growth of our economy depends on PSBs ability to flow credit to the market and maintain sufficient liquidity. If that doesn’t happen, the economy as a whole will shrink. To keep economy in good health, PSBs are simply necessary.

The Finance Minister said that the worst in banking system is now behind us. Our fast-growing economy needs to develop into a developed society and to do that, it is imperative that we must also be an ethical society. Shri Jaitley said with conviction that in evolution of India into a more ethical society, the last five years will go down in history as a turning point.

Talking about the success of Insolvency & Bankruptcy Code (IBC), Jaitley said that everybody concedes that IBC is a success story. It has brought back close to Rs. 3 lakh crore back into the banking system. All institutions have played a role in the success of the IBC.

On the issue of Non-Performing Assets (NPA), Jaitley said that for the last two or three quarters, the NPA curve is going down. The NPA didn’t go-up because banks made some strong decisions in the recent past. The NPA went-up because of truthful disclosure. There was no hiding under the carpet any more.

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