Stressing on consolidation in the banking sector, Union Finance Minister P Chidambaram, on Saturday, said while China had three banks in the top 20 in the world in terms of size, India had none.
Speaking at a function to release a book commemorating 75 years of the Indian Overseas Bank, he said while presence of all kinds of banks--regional, national and international--was important, India also needs at least one or two world-sized banks. “China has three among the top 20. We have none. I plead that there must be consolidation in the banking sector. We need one or two world-sized banks.”
The Minister said while nationalisation had taken banking to millions, one half of the country still lacked bank accounts. “Many still have to walk miles to obtain such services,” he pointed out and said the banks can take more responsibility.
Hailing the soundness of the Indian banking system and the work of the regulator, Chidambaram said while over 1,000 banks collapsed in the wake of the 2008 financial crisis, not a single bank in India shut down. He said the government, in the next five to ten years, has planned to infuse a capital of Rs 1,00,000 crore in the banking sector. “We are committed to the well being of the system,” he assured.
Terming the Direct Cash Transfer (DCT) that the Centre had decided to implement from January 1 as “sheer magic,” he said for the first time, the government will know where people’s money is once the scheme comes into effect. “While the government spends crores on the welfare of the people, nobody actually knows where exactly the money is. DCT will change this scenario,” he said. He added that no where in the world had any country ever attempted to provide unique number of 1.2 billion people. This in itself was a huge achievement, he said.
Earlier, the Minister, releasing a book titled “IOB @ 75 that traced the history of the bank,” hailed the “unparalleled vision” of the founders of India’s banks whom he said identified the need for a strong banking system and an open economy decades earlier.