FM Sitharaman – For wider reach of financial, banks should embrace digitisation

Recently at the centenary celebrations of the city based Tamilnad Mercantile Bank in Tuticorin, Tamil Nadu Finance Minister Sitharaman said banks including private sector should embrace digitisation towards ensuring that government  schemes reach the poor and downtrodden besides adopting financial inclusion for a wider reach. She further said, “With the use of digitisation through banking correspondents, the government’s financial disbursements were distributed to the needy after verifying their details during the COVID -19 pandemic.” Due to digitisation, the government was able to distribute Rs 1500 in three installments to the needy through their bank accounts during the COVID-19 crisis. She said that Prime Minister Narendra Modi launched Jandhan Yojana in 2014 to ensure everyone has a bank account and is able to use a Rupay card for transactions. She further stated in her address speech, “There is no necessity to open a branch in a place which does not have a bank. Today, to reach a bank account of the people who live there, all kinds of technologies are available… Even sitting from Tuticorin one can serve the banking requirements of people living in small villages through technology.” She said there are a lot of changes happening in the banking sector at a “fast pace” through digitisation. “The way forward for any bank, particularly for a bank like Tamilnad Mercantile Bank, to be more efficient, is to adopt complete technology related solutions”, she said. “Today financial technology is the biggest area and using that we are able to populate data into forms. It may be Income Tax or GST related. Auto-populating data (of a consumer) has been very useful (today).” Auto-populating data can be done only through ‘digitisation’ and the management of TMB should think of greater use of digitisation, she said. “There are a lot of prospects for banking… I think it is important for digitisation to be completely brought in. Digitisation cannot be avoided for your own good and for the sake of customers,” she said, adding TMB should onboard all its customers and ensure Financial Inclusion is implemented. Sitharaman after presenting a financial assistance to a beneficiary of the Tamilnad Mercantile Bank under the ‘PM Svanidhi scheme’, said today you are presenting a cheque to a woman who runs a business by selling ‘idlis’ in her pushcart, you are able to distribute the financial assistance because there is a scheme like PM Jandhan Yojana (financial inclusion scheme). “If that scheme was not available, today you would not have been able to distribute the assistance to the woman. It would not have been possible if PM Jandhan Yojana was not launched in 2014,” she said. Tamilnad Mercantile Bank’s 74 per cent of business was through “priority” sector lending and through these banks were able to expand into rural areas. During the Covid-19 outbreak, the Centre introduced the Emergency Credit Guarantee Liquidity Scheme towards enabling MSMEs to do business without collecting any additional collateral required, she said.

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