Financial Institutions play major role in GDP Growth: PC

Bangalore, Dec 29 (UNI) To sustain nine per cent GDP growth and achieve more, financial institutions including Banks, Provident Fund and Insurance companies have to adopt more pro-active measures to support the economy, Union Finance Minister P Chidambaram said today.

Speaking after launching Canara Bank's new Brand Identity here the Union Finance Minister felt that financial institutions will play a major role in providing linkage between higher GDP growth and Financial growth.

Expressing displeasure that the Indian financial sector remained rigid for too long, he said this tendency would not help in the efforts of taking Indian Economy to newer heights. "Banking, Insurance, Provident funds and Mutual funds sector have to grow in proportionate with the Indian GDP growth," Mr Chidambaram said.

Appealing all the stakeholders in the financial sector to scale up their potential the Finance Minister said, "If the country has to sustain growth and become economic powerhouse, banks should adopt pro-active attitude in their approach. When Chinese have such dreams and why can't we have it," he asked.

Opining that the Nationalisation of banks had provided a thrust, he said the sector needed to take the banking services to all sections of the society in the entire country and nationalisation helped.

"In the last three and half years the public sector banks have proved that they were the prime movers of the Indian economy. The flow of lending to Agriculture was increased by 27 per cent, SME's to 35 per cent and loans to students to 46 per cent. Still many more sections of the people at the bottom of pyramid needed to be brought up," he said.

Exhorting the public sector banks to differentiate themselves from the private sector financial institutions, he said they should offer more number of products and services.

UNI