Banks should embrace digitisation to ensure govt schemes reach needy: FM Nirmala Sitharaman

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Finance Minister Nirmala Sitharaman on Sunday 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.

Delivering her address at the centenary celebrations of the city-based Tamilnad Mercantile Bank in Tuticorin, Tamil Nadu, Sitharaman said even during COVID-19 pandemic with the use of digitisation through banking correspondents, the government’s financial disbursements were distributed to the needy after verifying their details.

“Prime Minister (Narendra Modi) was clearly aware that banking is important and did not hesitate that there can be accounts with zero balance, if they were opened under the Jandhan Yojana scheme (launched in 2014). But he ensured that every one must hold a bank account and be able to transact through a RuPay card,” she said.

Stating that the government distributed Rs 1,500 in three installments to the needy through their bank accounts during the COVID-19 outbreak, she said there are lot of changes happening in the banking sector at a “fast pace” through digitisation.

“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.

“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 can 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),” she said.

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 ‘idlies’ 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 this 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.