Finance Minister Nirmala Sitharaman has asked banks to adopt a more customer-friendly approach
Mumbai:
Finance Minister Nirmala Sitharaman on Monday said that banks need to be more customer-friendly in their approach so that credit provision becomes hassle-free.
Ms. Sitharaman said this during a post-budget discussion with industry representatives in Mumbai, making it clear that banks need not be lenient with credit underwriting standards by accepting any any adverse risk to a proposal.
During the interaction, a startup representative suggested an easy way to provide credit, whereby the President of the State Bank of India Dinesh Kumar Khara said the concerns of a company start-ups are more on equity side and make sure to get full backing in lending if enough equity is on the table.
Noting that the questioner is a woman running an innovative business, Ms. Sitharaman had several suggestions for the banking community and also voiced opposition to their attitude.
“At first, Mr. Khara gave a very bland answer. And after a little prompting, he started talking about a plan that received a lot of government support, the credit guarantee fund. for micro and small businesses (CGTMSE),” she said. .
“Banks will have to be more customer-friendly. Not to the point of having to accept adverse risks that they don’t need to bear, but need to be more customer-friendly,” the minister said.
Khara says the focus is on increasing the process’ reliance on end-to-end digitization, which will ensure a hassle-free experience.
He said that in the next two months, the bank will go completely digital for lending. Additionally, as long as the bank has reliable cash-flow visibility, credit growth for small businesses is likely to hit personal loan growth over time.
