Mumbai: The government's reform agenda for the banking sector was to "transform" the sector itself, union Minister of State for Finance Jayant Sinha said on Friday.
Addressing the 11th ASSOCHAM Annual Banking Summit here, he said that for this, the government has initiated four transformative steps for the banking sector.
The first is open up the banking sector and promote competition for which 23 new banking licences have been issued in the past 18 months, and now the banks would have to compete for deposits.
The second is Indradhanush - fundamental reforms addressing non-performing assets, capital adequacy, corporate government, separating the role of chairman and managing directors, besides establishing a Bank Boards' Bureau.
As part of Indradhanush, Sinha said the government has laid out exactly how the capital support will flow out to the banks and an amount of Rs.25,000 crore will be provided this fiscal with a like amount next year, to ensure banks have adequate capital to meet all their capital requirements.
The third would be strengthening the rights of creditors which would lead to fast recovery processes and smooth resolution of stressed assets.
In this context, Sinha said the government plans to bring in a world-class bankruptcy code for the country where the PSUs account for 70 percent of the banking businesses.
The fourth would be financial inclusion of all through Jan Dhan Yojana, Jeevan Jyoti Yojana, Jeevan Bima Yojana and the Mudra Bank.
Referring to the issue of black money, he said the government has initiated various steps including the foreign Black Money Bill, requirements of PAN card for transactions of Rs.200,000 and above, realty tranctions where cash payment cannot be more than Rs.20,000, etc, which would control the black money.
Sinha also gave away the 'Social Banking Excellence Award on the occasion.
ASSOCHAM president Sunil Kanoria, and State Bank of India MD B. Sriram also addressed the gathering.