New Delhi, Mar 31: Finance Minister P Chidambaram today made out a strong case for consolidation in banks stating the employees have nothing to fear on this count, as such an option would make the Indian banks become global in size and give a run for their money to foreign banks.
''Consolidation would only make our banks stronger,'' Mr P Chidambaram said at a function of the Punjab National Bank which marked the opening of its 2000th anywhere-banking branch.
Motivating the employees to ''embrace'' consolidation in the banking sector, the Finance Minister said their ''fears'' would prove to be unfounded as was the case at the time of introduction of computerisation.
The Finance Minister talked about three ''Cs'', which referred to - Computerisation, Convergence and Consolidation. He appealed to the employees to take the consolidation move of the government in a positive way. ''All of you are educated people who read newspapers, watch television and surf the internet. You know your banks would only get stronger by consolidation,'' he said.
As for lending to farmers at seven per cent, he said the Centre has deposited Rs 1700 crore to the RBI and the NABARD for filling the gap for the banks. ''Money has been deposited with the RBI and the NABARD last evening,'' he said adding that this way, the Centre would be returning as much as Rs 1700 crore to the farm sector.
The Finance Minister clarified that for availing of education loan up to Rs four lakhs, no collateral was required. ''Only the mother or father has to sign the application form along with the student,'' he said.
He said as the year 2005-06 comes to a close today and the new year opens tomorrow, 2006-07 would also be witnessing a vibrant GDP growth of over eight per cent. The virtuous growth cycle which began in October,2004 would continue next year, the Finance Minister said.
Mr Chidambaram emphasised the need for increasing the contribution of the banks to the GDP from 35 per cent to 50 per cent and the banks must continue to meet the credit requirements of all sections of the economy.