Bangalore, Mar 24: Lauding the nationalised banks for responding ''admirably'' to the liberalised economy, Union Finance Minister P Chidambaram today urged them to embrace new technologies and banking instruments to emerge as financial malls of the future.
''Gone are the days of traditional banking,'' he said, urging them to rise to the growing needs of the new economy and come out with new financial instruments.
On the performance review of nationalised banks in New Delhi yesterday, the Minister said over the past two years, the banks had performed admirably. ''I am very happy that banks have responded splendidly to the Government's policy suggestions,'' he added.
Mr Chidambaram was speaking after inaugurating SyndBank Services Limited, the first BPO subsdiary of nationalised banks, floated by Syndicate bank and also the 525th centralised banking services branch of Syndicate Bank.
He said Chairmen of various banks have agreed to introduce seven per cent interest on farm loans upto a maximum limit of Rs three lakh. The loan would be available to all sectors of agriculture, including value-added crops, and all sections of farmers.
Agriculture credit would significantly surpass the target of Rs 1,42,000 crore set for the year. The number of education loans extended during the first nine months of 2005-06 had crossed 1,76,000 and that of self help groups covered had crossed 3,25,000 by February-end.
''The goal is to ensure that more people are able to avail of banking services,'' he said, adding that the inclusion committee he had proposed in the budget would submit its report in a few months.
Mr Chidambaram urged the nationalised banks not to be afraid of technology or new ideas. ''Infact, men and women created technology and they should master it, instead of being afraid of it. Otherwise, technology will overtake you,'' he added. Referring to new innovations in the banking sector such as mobile banking, real time gross settlement and increasing foreign remittances, he said remittances from abroad had to some extent replaced hawala trade and every year the country was getting a remittance of 30 billion dollars. This was considered a capital flow and it would only increase over the years in view of the increasing number of Indians going abroad for work.
''Computerisation, convergence and consolidation'' had become part of the vocabulary of people in the banking system and they must make use of the opportunities coming in the way, he said.
Mr Chidambaram said technology was changing at an accelerated pace and the banks should keep pace with the change.
He complimented Syndicate bank for introducing the first BPO services among nationalised banks and taking the initiative for implementing core banking solutions in 2001.