GS 3 – ECONOMY
Context
- At the 120th foundation day celebrations of City Union Bank (CUB) in Chennai, Finance Minister Nirmala Sitharaman highlighted the critical role played by private sector and scheduled commercial banks in India’s nation-building efforts.
Key Highlights
- Banking Stability & Asset Quality
- Macro Stress Tests show that Indian scheduled commercial banks’ aggregate capital levels remain above the regulatory minimum, even under adverse conditions.
- Result of strong capitalisation and record-low NPAs.
- Ensures steady credit flow for households, MSMEs, and industries.
- Contribution to Economic Growth
- Banks have enabled job creation, infrastructure development, and investment growth.
- Stability of the banking sector preserved India’s growth even during global uncertainties.
- India’s real GDP grew at 7.8%, exceeding expectations, partly due to banking support.
- Policy Support & Reforms
- GST roll-out has made the economy more transparent and reduced compliance burdens, especially benefiting small businesses.
- Banks are urged to:
- Expand credit,
- Support MSMEs and unbanked populations,
- Ensure timely funding,
- Meet diverse requirements of emerging sectors.
- Nation-Building & Trust
- Banking industry seen as a pillar of India’s fast-growing economy.
- Emphasis on trust, technology, and transparency as guiding principles.