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At Pune retreat, banks report 22 crore homes under Jan Dhan

Pune, Jaury 2: The Jan Dhan scheme has facilitated opening of 10.3 crore bank accounts, while nearly 99 percent of households have been covered, the fincial services secretary Hasmukh Adhia said on Friday. “Of 25 crore households in the country, banks have been able to survey 21.9 crore households. Of the areas surveyed, 98.4 percent have been covered by bank accounts,” Adhia said, briefing reporters here on the first day of the two–day high–profile retreat called Gyan Sangam for banks and fincial institutions. Universal fincial inclusion is one of the issues being discussed by participants organised in various group sessions, Adhia added.

Describing the problems faced in surveying the remaining over three crore households that were mostly in gated communities or affluent households from where surveyors were being shooed away, Adhia said these are “households that don’t require our help”. The government was trying to get Aadhaar card numbers seeded with bank accounts, while around 33 percent of seeding has been realised, he added. Earlier, the secretary said the government is looking at ways to improve the functioning of these banks and make it easier for them to raise capital. “If we have to give better support to banks, if the banks have to play a complimentary role, can we think of some other structures by which it is easy for the banks to mage their affairs, it is easy for them to get capital from the market and it is easy for them to improve the balance sheets?” Adhia said, briefing reporters on the subjects that would be discussed at the retreat that will help prepare a draft for reforms in the fincial sector

“We would like to generate ideas on what could be the priority sector prescription for the banks in view of the present state of the economy,” he said. The lenders will discuss various issues starting from fincial inclusion, profitable priority sector lending (PSL), effective risk profiling and recovery mechanisms, along with consolidation and restructuring of these banks for better efficiency, governce and capital efficiency, the union fince ministry said in a statement.

The retreat in Pune at the tiol Institute of Bank Magement was iugurated by Minister of State for Fince Jayant Sinha. Prime Minister rendra Modi will meet bankers on Saturday during the concluding session of the retreat. Fince Minister Arun Jaitley and Reserve Bank Governor Raghuram Rajan will be attending the retreat. Adhia also raised the issue of high levels of stressed assets across public sector banks (PSBs) and low credit growth. Stressed assets at public sector banks, including bad debt and restructured loans, rose to 12.9 percent of total loans as on September–end.

On banks’ non–performaing assets (NPAs), Adhia said methods to improve risk magement, asset quality and recovery would be discussed. Another issue that needed to be addressed, Adhia said, was to raise the savings rate from 30 to 35 percent using the accounts as channels for direct transfer and pension and insurance products and leveraging technology to improve banking technology. The government decided last month to permit public sector banks to raise up to Rs.160,000 crore from capital markets by diluting government holding to 52 percent in phases so as to meet Basel III capital adequacy norms. The government controls 22 of the 27 public sector banks through majority holding. In the remaining five banks, state–run State Bank of India holds majority stake.

Presenting his maiden annual budget in July, Fince Minister Arun Jaitley said that the capital of state–run banks will be raised through sale of shares to the public. Upwards of Rs.240,000 crore of capital by equity is required to be infused into India’s banking sector by 2018. The Basel III norms, which will come into effect on March 31, 2019, were put in place following the 2007–08 fincial crisis in the US. (IANS)

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Ankur Kalita

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