India needs 4-5 more banks like SBI to meet changing requirements of the Indian Economy

India needs 4-5 more banks like SBI to meet changing requirements of the Indian Economy Smt. Nirmala Sitharaman, Union Finance and Corporate Affairs Minister, has stated that India requires four or five more banks like SBI. She stated that we need to scale up banking to meet the changing needs of the economy and industry in light of the shifting recent realities of the economy and industry. “With the way the economy is shifting to a different plane entirely, with the way industry is adapting, so many new challenges keep arising. To address these issues, we require not just more, but larger banks.” During her keynote address at the 74th Annual General Meeting of the Indian Banks' Association (IBA) in Mumbai today, the Union Minister shared this viewpoint with the banking community. The Finance Minister urged the industry to envision how Indian banking should be in the near and long term future. “If we look at the post-COVID scenario, India's banking contour will have to be very unique to India, where digitization has been extremely successful. While banks in many countries were unable to contact their customers during the pandemic, the level of digitization in Indian banks enabled us to transfer funds to small, medium, and large account holders via DBT and digital mechanisms.” The Union Minister emphasised the importance of seamless and interconnected digital systems in ensuring the Indian banking industry's long-term viability. "The long-term future of Indian banking will be largely influenced by digitised processes." Despite the benefits of digitization, the Finance Minister observed that there are significant disparities in access to financial services. She stated that in some areas of our country, brick-and-mortar banks are required. The FM directed IBA to improve banking access in all districts through a streamlined approach and optimal use of digital technologies. To accomplish this, the Union Minister directed the IBA to conduct digitised location-based mapping of all bank branches in each district of the country. “Almost two-thirds of nearly 7.5 lakh panchayats have optical fibre connections; IBA should take this into account and conduct an exercise to determine where banks should have a physical presence and where we can serve customers even without a physical branch.” IBA should take the lead and supplement the government's efforts to increase financial inclusion and access to financial services, particularly in unserved and underserved areas.”