Sitharaman tells banks to assess core strengths before scaling up operations
Finance Minister Nirmala Sitharaman on Saturday said banks should assess their strength and weakness before planning to scale up of operations.
“Institutions like banks should understand their core strengths and offer benefits to people like giving value-added features like phone banking facilities or rolling out of chatbots. So to assist customers and should not take up unnecessary scaling up of operations”, she said, at the 116th Foundation Day celebrations of Tamil Nadu-based City Union Bank here
“Scaling up (of operations in banks) is becoming like a disease. (There is a trend) that everybody should scale up, tomorrow I should be three times the current size. Today, I am in this state and in six states. I am planning to expand presence across the country. Whether it will add to my core or make it weak. That is the assessment banks should do”, she said.
To check whether the banks have the ability to scale up operations. Then the regulators like Reserve Bank of India come into play, she said.
Sitharaman said if a financial organization in the present situation has a name ending with ‘Bank’ doubts are raised on the functioning of it. Heaped praise that City Union Bank has been functioning steadily for the previous 115 years.
Stating that even a small error inflicted by an employee would raise issues on the functioning of a bank, she said, “Even if there is a corruption grievance against a cooperative bank, occasionally questions are raised on whether the public money is stable there”.
Referring to a recent media report on City Union Bank MD and CEO N Kamakodi comments, the bank’s priority area was on giving ‘consistency’ and ‘stable’ operations and having ‘people’s trust’, she said, “it is good principle (for the bank)”.
She said banks spoke about ‘consistency’ is good quality and added that banks should run on stable operations.
“If there is no stability, then the economic activity surrounding it will get affected,” she said. Put in having “people’s trust is very important, if a bank loses people’s trust then it is bad for the bank and also to the country”.
Earlier, Sitharaman published the bank’s chat-bot facility that would assist bank customers to enable to disseminate funds, block cards or take up any other banking service