Pitching for increased digital payment modes, including adopting Unified Payment Interface (UPI), Sitharaman urged banks to discourage non-digital payments as much as possible.
Addressing the 73rd annual general meeting of the Indian Banks’ Association (IBA), she also said that banks should ideally make sure that all accounts are linked with Aadhaar number of respective customers by December. If it is not complete, then the linking should be done by March 31, 2021.
Against the backdrop of entities pushing for digital and contactless payment options, especially amid the coronavirus pandemic, Sitharaman said that when RuPay is becoming global, she would not think of giving any card, other than RuPay, to Indians.
RuPay is a payment card launched by NPCI, an umbrella organisation for operating retail payment and settlement systems in the country.
“I would not think it is necessary today in India when RuPay is becoming global, for Indians to be given any other cards first than RuPay itself. So, promote Rupay cards. Make sure that the NPCI becomes a brand-India product which can be promoted elsewhere in the globe and NPCI therefore should be a priority,” Sitharaman said.
The minister’s remarks also come at a time when the government is encouraging activites revolving around Aatmanirbhar Bharat (self-reliance).
As much as possible, the minister said that banks should discourage non-digital payments and should bank on promotion of digital payment techniques as well as adopt many of the UPI (Unified Payments Interface)-driven payments.
“UPI should be a common parlance word in all our banks,” she said.
UPI is an instant real-time payment system, developed by NPCI, to facilitate inter-bank transactions through mobile phone.
According to the minister, financial inclusion story is not over and there are many bank accounts that are still not linked with the Aadhaar numbers of the account holders.
She said banks should try and ensure that all accounts are linked with Aadhaar numbers of respective customers by March 31, 2021.
“So, ideally by December, if not then by March 31, 2021, every account should have a PAN where applicable and Aadhaar,” Sitharaman said.
About amalgamation of banks, the minister said she wishes to have each of the amalgamated banks to be as big as the State Bank of India (SBI).
“We can have eight more SBIs in this country post-amalgamation. I am sure you are putting your energies in seeing how best you can be, not just in size but also in the kind of diversified activities that you can undertake and therefore India is thirsting for large banks,” she said.
Further, Sitharaman said banks should understand the pulse on the ground, the needs of the customer and be sensitive to their requirements. Banks should attend the legitimate concerns of the customers, she stressed.
“Amalgamation should not just remain as an exercise to bring two or three banks together, it should now become an organic mechanism to grow, and to grow to such scales that the new demands from the industry, economy, and businesses can all be met up in a changing world,” she added.
While speaking at the event, Minister of State for Finance Anurag Thakur said green shoots are visible in the economy.
At this juncture, the most important thing required is flow of credit to productive sectors and banks will play an important role in this regard, Thakur said.
Department of Financial Services Secretary Debasish Panda said banks should give utmost priority to adoption of technology.
“It is not like you yourself will have to re-invent the wheel. There are a large number of fintech players in the ecosystem who are already operating and they want tie-ups with the banks. Unfortunately, not much is happening in that front,” he said.
Panda also urged all banks to partner with fintech players so that digital lending gets a push.