Financial institutions to 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 on the occasion of launching Canara Bank's new 'Brand Identity' here, he said financial institutions would play a major role in providing linkage between higher GDP and financial growth.

Expressing displeasure on the Indian financial sector remaining rigid for too long, he said this tendency would not help in taking Indian Economy to greater heights.

''Banking, Insurance, Provident and Mutual Funds have to grow proportionate to the Indian GDP growth,'' he said.

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

''In the last three and half years, the public sector banks have proved that they are the prime movers of the Indian economy. The flow of lending to agriculture has increased by 27 per cent, SMEs to 35 per cent and loans to students to 46 per cent.

''Still many more sections of the people at the bottom of the pyramid need 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