State Bank of India chairman Arundhati Bhattacharya on Wednesday said the country’s banks now need to adhere to strict norms for maintaining credibility and attracting foreign capital in a capital deficient environment. On the other hand, the lenders should adopt inclusive approach to bring more people into the system of banking back up for the financially weaker sections.
Notably, the country’s largest lender, SBI, has identified around 7 lakh accounts opened under Pradhan Mantri Jan-Dhan Yojna for providing overdraft facility to offer small personal loans.“Now, banks are required to maintain LCR (liquidity coverage ratio) over and above CRR and SLR. Liquidity risk is the biggest risk which the banking sector was facing today,” Bhattacharya at an event organised by industry body Ficci here.Reserve Bank of India, however, relaxed Basel III-mandated liquidity coverage ratios for banks last month.The SBI chief said technology was enabling the lender in reaching out to the people in the villages. Under the financial inclusion programme, the state-run bank has so far opened over 10 crore accounts.“The 7 lakh accounts, which we have identified, are for giving loans for personal purposes, not necessarily for entrepreneurship. The people belong to low-income group and had opened accounts under Pradhan Mantri Jan-Dhan Yojna,” said Bhattacharya.
Asked about the process of selecting the Jan-Dhan accounts for offering personal loans, she said, “They are basically all the people who have sufficient turnover in their accounts in order to get an overdraft.”The size of the loans to be disbursed depends on the amount of turnover in their accounts, Bhattacharya said, adding disbursal of these small loans to the low-income group people is being carried out by business correspondents.The SBI chairman said even after the ending of Pradhan Mantri Jan-Dhan Yojana, people continued to open 60,000 accounts at its branches per day for the financial inclusion scheme.Backed by the upgradation of business correspondents model, the bank is now coming up with small value insurance, investment and flexible deposits products. Bhattacharya said technology was becoming a great enabler in reaching out to the people in the villages. Currently, cyber crime was an important issue of concern among the bankers, she added.
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