Finance Minister Arun Jaitley has said that there is an immediate need to give impetus to credit growth. Making his opening remarks during the Pre-Budget consultative meeting with the representatives of banks and financial institutions in New Delhi yesterday, he said that credit growth, year-on-year basis, declined to 10 per cent in September last year, with Public Sector Banks recording a growth of 7.9 per cent. Mr Jaitley said that growth in deposits also declined to 12.9 per cent as of September last year from 13.7 per cent as of March last year. Highlighting major initiatives of the Government, Mr Jaitley said that about 10.8 crore accounts have been opened till 6th of this month under the Pradhan Mantri Jan Dhan Yojana out of which around 60 per cent are in rural areas.
He said banks have been asked to provide universal access to banking facilities under which all the six lakh villages in the country will be provided at least one basic banking account, per household, with indigenous RuPay Debit Card having inbuilt accident insurance of one lakh rupees and Life Insurance cover of thirty thousand rupees. He said that an amount of 8487.40 crore rupees was deposited in the accounts till 6th of this month under the yojana. Mr Jaitley said that the 8.88 crore RuPay Debit Cards has been issued till 6th of this month. He said a top level Retreat for Banks and Financial Institutions called Gyan Sangam was organized in order to create a platform for discussions on issues relating to banking sector reforms, achieve consensus to improve and consolidate the position of Public Sector Banks, get ideas from prominent experts in the field and prepare a blue print of reform action plan.
He said that during the two day Bankers’ Retreat, the Prime Minister assured that the banks will be run professionally and there would be no interference. Mr Jaitely informed that in follow-up, Ministry of Finance had issued a circular to public sector banks, Financial Institutions and Insurance Companies assuring them of freedom of non-interference in matters of commercial decisions, transfers and postings. Various suggestions were made by representatives of Banks and Financial Institutions which include incentivizing digital and plastic payment in lieu of cash payments by giving one per cent cash credit incentive and exemption from the Service Tax to digital payments, digitization of profitable and capable primary agriculture credit societies, measures to give impetus to credit growth and measures for early settlement of disputes through the DRTs including Lok Adalats. Other suggestions included exemption from the Service Tax to interest payments made to senior citizens under the Vridh Awastha Bima Yojana, giving priority sector status to micro finance sector and credit to Scheduled Caste and Scheduled Tribe youth for setting-up their enterprises to boost self employment among them.
