India is becoming the engine of global growth with 15 percent share in global GDP growth: PM Modi

April 02, 2024 | 10:07:49

Says today, we have reached a point where the Indian banking system is being seen as a strong and sustainable banking system of the world.

NEW DELHI: Prime Minister Narendra Modi stressed the need to study “newer banking structure” with the evolving changes in the financial industry's landscape. Addressing a gathering at the inauguration event for the commemoration of 90 years of the Reserve Bank of India (RBI) in Mumbai, PM Modi said that there may be a requirement for newer ways of "financing, operating and business models" in the changing landscape.

The Prime Minister said that the banking sector needs to move forward to ensure that it can fund the credit needs of the projects necessary for the country's future growth as the government eyes a developed India by 2047.

“There are some challenges confronting the industry along with this, including artificial intelligence and blockchain, which are changing the face of banking, cyber security amid the increasing reliance on digital banking and innovations like fintechs,” he said.

“In such a situation, we need to think about the changes that will be required in the country's banking sector and its structure,” the Prime Minister added.

PM Modi also said an assessment of the credit needs should be done by the RBI, keeping in mind the growth prospects and potential of the country.

The Prime Minister did not specifically mention ownership of banks, but it can be noted that corporate ownership of banks has been a very controversial issue in the past.

Those in support of allowing corporates to own banks said business houses can pump in the required capital into a lender that can ensure that funding needs of the economy can be fulfilled.

Those against the idea, which include former RBI Governor Raghuram Rajan and Deputy Governor Viral Acharya, have flagged the risk of conflict of interest in such a structure where corporates or large industrial houses own lenders.