Mukherjee asks PSBs to accelerate financial deepening

New Delhi, Aug.14 (ANI): Union Finance Minister Pranab Mukherjee has asked the Public Sector Banks (PSBs) to accelerate the financial deepening else it could constraint the full potential of the Indian economy.

Addressing the Chief Executive Officers (CEOs) of all public sector banks and financial institutions during a review meeting in the national capital, Mukherjee on Saturday said that this is essential to maintain high GDP growth trajectory.

In order to meet the needs of one of the fastest growing economies of the world, banks will have to constantly augment their capital base, he further added.

He asked the public sector banks to ensure convergence of Indian Accounting Standards (IAS) with the International Financial Reporting Standards by 2012, although the banks are required to adopt these standards by 2013.

Mr. Mukherjee directed all the banks to focus on financial inclusion to reach out to those who are still left outside the banking network by using new technologies and business correspondents etc.

He said that this is an important priority of the Government as only 37.2 per cent of bank branches of Scheduled Commercial Banks are in rural areas and only about 40 per cent of the country's population has bank accounts.

Mr. Mukherjee directed the banks to make their Financial Inclusion Plans (FIPs) for covering those villages with a population of over 2000 (as per 2001 Census) in consultation with the State Governments by March 31, 2010.

He said that he understand that these Financial Inclusion Plans have been already finalized by most banks and are being scrutinized by the RBI.

In order to meet the increasing demand and expectations of consumers and to provide and maintain high standard of services by the public sector banks and financial institutions, management of human resources and proper training of officers and staff of PSBs/FIs become very important in the coming years, he stated.

He also said that although proper grievance redressal mechanism is in place, still many people do not get satisfied.

He asked the banks not only to ensure that grievances are redressed properly on time but should ensure that proper reply to customers is also given.

Minister of State for Finance Namo Narian Meena, Secretary, Financial Services R.Gopalan, Deputy Governor, RBI, Chairman, NABARD and senior officials of the Ministry among others were also present during the meeting. (ANI)