Prime Minister Narendra Modi on February 26 insisted on raising corporate credit to meet the needs of a deficit economy. He also stated that financial products will need to be adapted to fintechs and startups. Despite the government’s efforts to promote the private sector, the public sector still needs its presence in banks and insurance to support the poor. The prime minister promised to help many small businesses during the pandemic where a credit of Rs 2.4 trillion was granted to ninety lakh MSMEs. There is a need to support MSME and startups and boost their credit flow.The government has embarked on reforms and opened up areas such as agriculture, coal and space.It is now incumbent upon the financial sector to understand the aspirations of rural and small towns and make them the strength of Aatmanirbhar Bharat. As our economy grows and grows rapidly, so too has the credit flow become just as important.We must look at how credit reaches new sectors, new entrepreneurs.Now, we are going to have to focus on creating new and better financial products for startups and fintech.Declaring that Kisan Credit has assisted small-scale farmers and ranchers in taking over informal credit,the prime minister said the private sector will now need to think about innovative financial products for this part of society. He believes that the government has a clear vision of the financial services sector and is taking steps to make it dynamic, proactive and strong.The experience, trust and transparency of individual depositors and investors is the government’s top priority. The trust is built around deposit security and economic growth.Old policies with respect to banking and non-banking need to be changed.
The financial sector suffered ten or twelve years ago from aggressive lending.Measures have been taken to remove the country from a credit culture that is not transparent.The government recognizes the ups and downs that businesses face and does not encourage people to believe that all business decisions are made with the wrong intentions.The government has a responsibility to make any business decisions that are well-intentioned.Through the 2021-22 budget, the government proposed to privatize two public sector banks, authorised 74 percent of foreign direct investment in the insurance industry and announcement of the initial public bid by Life Insurance Corp of India.ARC will focus on addressing bad debts, which will help strengthen PSBs and increase lending capacity. There are 130 crore people with Aadhaar cards and 41 crore people with Gandhian accounts, 55 percent of whom are women. On an average Rs 4 lakh crore value transactions are carried out via the UPI platform each month and there are 60 crore holders of RuPay cards. All sections of the society have access to credit and Rs 15 lakh crore have been expanded across MUDRA Yojana.Around Rs 1.15 lakh crore were placed in 11 crore farming families by PM Kisan Swanidhi Yojana.