"Private enterprises are being promoted wherever possible, still, along with this, an effective participation of the public sector in banking and insurance is still needed by the country," he said in a webinar on effective implementation of Budget provisions regarding financial services.
Modi noted that 10-12 years ago banking and the financial sector in the country was severely harmed in the name of aggressive lending. "Steps have been taken one by one to free the country from non-transparent credit culture," he said adding that the government's top priority is to ensure that the depositor as well as investor, experience both trust and transparency.
"The old ways and old systems of banking and non-banking sectors are being changed," he observed adding that now instead of brushing the bad loans under the carpet, it is mandatory to report even one day non performing asset (NPA). The prime minister said that a new ARC structure is being created which will keep track of NPAs of banks and will address loans in a focussed way.
Modi assured that the government understands the uncertainties of the business and recognizes that every business decision is not underlined by bad intentions. "In such a scenario, it is the responsibility of the government to stand by business decisions taken with clear conscience, we are doing this and will continue to do so," he said adding that mechanisms like Insolvency and Bankruptcy code, are assuring the lenders and borrowers.
The prime minister observed that there is a lot of potential for banking and insurance in the economy and in view of this several initiatives have been announced in this budget including privatization of two public sector banks, permitting upto 74% FDI in insurance, listing Initial Public Offering for LIC, etc.
Modi praised the excellent work of Fintech Startups in creating new and better financial products and their exploration of every possibility in this sector. "Fintechs have a very high participation in the Start Up Deals that have taken place in the Corona era as well," he said adding that experts hold view that this year also there would be a great momentum for the financial sector in India.
Modi asked the financial sector to create innovative financial products for those working in the informal sector and noted that that the country is rapidly moving towards financial empowerment after financial inclusion. He also emphasised on encouraging sovereign wealth funds, pension funds and insurance companies to invest in infrastructure.
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