Financial Services Secretary M. Nagaraju announced on Tuesday that public sector banks are set to launch new financial products over the next few months to boost credit growth across all sectors. Speaking at the Financial Inclusion and Fintech Summit organized by the Confederation of Indian Industry (CII), Nagaraju emphasized the government’s commitment to expanding credit access, particularly for the country’s growing young population.
Commitment to Enhancing Credit Access
“We are committed to enhancing credit and want to push as much credit as possible,” Nagaraju stated. He revealed that new products aimed at sectors like Micro, Small, and Medium Enterprises (MSMEs) will be introduced within the next three to four months to further this goal.
Nagaraju highlighted the government’s recent initiatives to improve credit availability for small borrowers, including the introduction of a new credit model announced in the Union Budget. This model is designed to assist borrowers with no prior financial history.
Tackling the Challenge of Digital Frauds
While the banking sector remains robust, Nagaraju acknowledged the growing challenge of digital frauds, which pose a risk to financial stability. He urged banks to prioritize tackling this issue, noting that digital innovations combined with financial literacy can help mitigate the threat.
Banking Amendment Bill Likely in Winter Session
On the sidelines of the summit, Nagaraju shared that the Banking Amendment Bill, introduced during the monsoon session of Parliament, is likely to be moved in the ongoing winter session. The proposed amendments include redefining “substantial interest” for directors, increasing the number of nominees allowed for bank deposits, and revising compliance reporting timelines.
India’s Thriving Fintech Ecosystem
Discussing fintech, Nagaraju noted that India ranks third globally in terms of startups, with approximately 13,000 fintech entities operating in the country. He reiterated the government’s commitment to financial inclusion and collaboration with the fintech industry to expand services in under-penetrated regions.
“The government is making significant efforts to foster ease of doing business and reduce the compliance burden for fintech companies,” he said. He also highlighted the robust digital infrastructure and schemes like PM Suraksha Bima Yojana and Atal Pension Yojana as key opportunities for the fintech sector.
Need for Balanced Growth in Fintech and Banking
Nagaraju stressed the need for a balanced approach that promotes innovation while safeguarding the integrity of regulatory systems.
Focus on Rural and Cooperative Banking
NABARD Chairman Shaji KV, who also spoke at the event, emphasized the importance of democratizing technological advancements, particularly for the rural economy. While major banks have gained from digitization, cooperative banks and regional rural banks (RRBs) often lack the resources to invest in new technologies. Shaji called for greater collaboration to ensure these institutions are included in digital transformation efforts.
He urged fintech companies to leverage government schemes to promote equitable growth and support rural banking infrastructure. “It’s critical to ensure that RRBs and cooperative banks are not left behind in this era of technological progress,” Shaji concluded.
The event highlighted the government’s continued focus on financial inclusion, digital innovation, and equitable growth across all sectors of the economy.
