Fintech will lead to financial revolution: PM Modi

Prime Minister Narendra Modi said the economy of any country is as progressive as its banking system is strong and that fintech would lead to a financial revolution.

The banking sector has become a medium for good governance and better service delivery, Modi said, adding that Digital Banking Units (DBUs) will further financial inclusion and enhance the banking experience for users.

“If Jan Dhan accounts had laid the foundation of financial inclusion in the country, then fintech would form the basis of financial revolution,” he said on Sunday while dedicating 75 DBUs in as many districts in the country. DBUs are brick-and-mortar outlets that provide facilities such as account opening, balance checks, fund transfers, fixed deposit investments, loan applications, credit and debit card applications, and tax and bill payments, etc.

Modi attributed India’s sustained economic growth to the efforts of the current government to replace pre-2014 “phone banking” with “digital banking”.

“Banking today has gone beyond financial transactions and has also become a medium of good governance and better service delivery,” he said.

Prior to 2014, bank executives used to get phone calls that directed the manner in which they functioned, he recalled. The Narendra Modi-led NDA government came to power in May 2014.

Govt taking banks to the people

“Phone banking politics had made the banks unsafe and made the country’s economy insecure by sowing the seeds of thousands of crores of scams,” he said, stressing that the government had transformed the system with transparency as the main focus. He said the government had expedited the resolution of bad bank debt with the Insolvency and Bankruptcy Code (IBC).

By identifying non-performing assets (NPAs), lakhs of crores of rupees had been brought back into the banking system.

“We recapitalised banks, took action against wilful defaulters and reformed the Prevention of Corruption Act,” he said.

The Prime Minister said a new self-driven mechanism has been created for the banking system through new initiatives such as DBUs and the innovative use of fintech. “There is much autonomy for consumers, there is also the same convenience and transparency for the banks,” he said.

The Prime Minister said his government had taken banks to the people, in contrast with the ways of the past when it used to be the other way round.

“We have given top priority to ensure that banking services reach the last mile,” he said.

The Prime Minister urged small business owners from villages to shift fully to digital transactions. He also asked banks to help connect 100 merchants each to go totally digital for the benefit of the country.

“I am sure this initiative will take our banking system and economy to a stage which will be future ready and will have the capability to lead the global economy,” he said.

The combination of technology and economy has helped in eliminating the digital divide as well as corruption, he said, adding the government has transferred Rs 25 lakh crore directly to beneficiaries via the Direct Benefit Transfer (DBT) scheme.

“Digital economy today is a great strength of our economy, of our startup world, of Make in India and of self-reliant India,” he said.

He also said another instalment under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme will be transferred on Monday. Under the scheme, Rs 6,000 per year is provided to eligible farm families, payable in three equal installments of Rs 2,000.

Referring to the move to launch a digital currency based on blockchain, the Prime Minister said, “Be it digital currency in the coming times, or digital transactions in today’s time, apart from the economy, many important aspects are associated with them.”

Speaking on the occasion, finance minister Nirmala Sitharaman said DBUs will enable people who do not have a personal computer or even a smartphone to access banking services digitally, without the need for paper documents of any kind. As part of the FY23 budget, the finance minister had announced the setting up of 75 DBUs in as many districts of the country to commemorate 75 years of India’s independence.

Source: Economic Times

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