Banking sector needs to support growth: Pranab Mukherjee

New Delhi, Nov 11 (IBNS) Union Finance Minister Pranab Mukherjee on Thursday said India, with growth trajectory heading towards 9% or more in the coming years, is placed at a critical juncture.

Mukherjee said that banking sector needs to support this growth momentum in the economy while giving due attention to the asset quality and prudent provisioning to balance emerging returns and risks.

He was addressing the senior officers and employees of the Union Bank of India and other dignitaries present on the occasion of 92nd Foundation Day of Union Bank of India.

On this Occasion, Mukherjee also released a book entitled ?Beacons? Bank?. This book is a story about Union Bank of India, which is written by M.V. Kamath.

The Finance Minister said though the Indian banks have emerged from the global financial crisis successfully with relatively good health yet challenges still remain. He further said that there was a decline in the profitability in the Indian banks in 2009-10.

He said that the asset quality of banks deteriorated and the coverage ratio of provisions showed a fall at the aggregate level reflecting a weakening cushion to meet NPA losses.

Therefore, the Minister said that the banks need to give due attention to the asset quality management and prudent provisioning.

As regards financial inclusion, the Finance Minister appreciated the new initiatives taken by Union Bank of India in this field.

The Finance Minister specifically mentioned about the financial support to BPL families provided by the bank through its Adarsh Gram Yojana under which it adopted 103 villages for all round development and credit delivery to farmers through Agriculture Credit Societies on a technology driven Banking Correspondent Model Platform.

Mukherjee also expressed his pleasure as the Bank achieved 100 per cent core banking in its Regional Rural Banks (the first bank to achieve this requirement in a record time) and released the two million biometric cards under its financial inclusion plan.

He also appreciated the Bank?s growth in its business from just Rs. 50,000 crore to Rs.3 lakh crore during this decade and its vision to become among the top three banks in India by 2012.

The Finance Minister asked all the banks to step up their efforts towards financial inclusion using the instrument scale neutral technology as this would help in bringing the vast population into the ambit of formal finance and also boost future economic growth coupled with equity.