Finance minister Pranab Mukherjee today asked public sector banks (PSBs) to accelerate financial deepening in order to realise the full potential of the Indian economy. This, he said, was essential to keep the economy on a high GDP growth trajectory.
"Financial deepening has to be accelerated, else it could constrain the full potential of the Indian economy. This is essential if we are to maintain India's high GDP growth trajectory," he said.
Addressing the chief executives of public sector banks and financial institutions during a review meeting in New Delhi today, the finance minister directed banks to reach out to those who are still left outside the banking network, in order to achieve a wider spread of development.
This is an important priority of the government as only 37.2 per cent branches of scheduled commercial banks are in rural areas and only about 40 per cent of the country's population has bank accounts, he pointed out.
The finance minister directed the banks to make their financial inclusion plans (FIPs) for covering those villages with a population of over 2,000 (as per 2001 census) in consultation with the state governments by 31 March 2010.
Banks will also have to constantly augment their capital base in order to meet the needs of one of the fastest growing economies of the world, he said.