New Delhi, Feb 8: The government will soon constitute a High-Level Committee on Banking for Viksit Bharat to prepare a blueprint for creating mega-lenders capable of meeting the financing needs of a developed India, Finance Minister Nirmala Sitharaman said.
“We want the committee to tell us what kind of things we need to do so that banking is made available for funding Viksit Bharat,” she told PTI Videos in an interview.
Asked if the panel would recommend mergers of public sector banks, Sitharaman said the focus should not be narrowed. “It is for India’s banking sector to be made big enough, big enough in the sense, made or primed to take care of Viksit Bharat funding. You have to reach Viksit Bharat destination…it needs money, financing, credit, banking facilities to reach the common man.”
On the timeframe for forming the committee, she said, “We will do it at the earliest.”
In her Budget speech on February 1, she had proposed setting up the “High-Level Committee on Banking for Viksit Bharat” to comprehensively review the sector and align it with India’s next phase of growth, while safeguarding financial stability, inclusion, and consumer protection.
To improve scale and efficiency in public sector NBFCs, the Budget also proposed restructuring Power Finance Corporation (PFC) and Rural Electrification Corporation (REC).
“A lot of work has happened in the ministry concerned. They have come up with this expectation. Let’s see how they play it out,” she added, when asked about potential bank mergers.
REC, a subsidiary of state-owned PFC, plays a key role in funding power generation, transmission, and distribution projects. In March 2019, PFC acquired a 52.63% stake in REC from the government by transferring Rs 14,500 crore and assuming management control.
Both PFC and REC are Navratna central public sector enterprises, and the acquisition aimed to consolidate entities operating in the same space. Last week, the PFC board gave in-principle approval to merge REC with itself, following the Budget announcement. (Agencies)
