Prime Minister Narendra Modi, in his address on the 78th Independence Day from the ramparts of the iconic Red Fort, hailed the reforms in the banking sector that have strengthened India’s banking system. He emphasized that Indian banks now count among the strongest in the world.
“The banks were in trouble, we made several reforms and today our banks are counted among the strongest banks in the world. This increases the strength of the formal economy,” said PM Modi.
Blueprint for Growth
The Prime Minister also stated that reforms by a country establish a blueprint for growth and that the government’s path of reforms has become a blueprint for growth in India.
“The reforms serve as a kind of blueprint for our path to growth,” said PM Modi.
READ MORE: PM Modi Hoists Tiranga At Red Fort, Marks 78th Independence Day With Grandeur
Commitment to Reform
He further emphasized that the commitment to reform is not restricted to editorials or for small praise but for making the country strong.
“We have brought big reforms on ground. For the poor, middle class, deprived… for the aspirations of our youth, we choose the path to bring reforms in their lives. I want to assure the citizens of India that our commitment towards bringing reform is neither just for editorials, praise nor under compulsion. It is to strengthen the country,” said Prime Minister Modi in his Independence Day speech.
Impact on MSME Sector
PM Modi pointed out that the banks have provided great stability to the MSME sector, and small traders and hawkers have also benefitted.
RBI’s Positive Assessment
Recently, the Reserve Bank of India (RBI) highlighted that India’s banking system is robust, with the gross NPA (Non-Performing Assets) of scheduled commercial banks and NBFCs below 3 percent. The RBI noted several key factors contributing to this positive trend, including enhanced provisioning for bad loans, sustained capital adequacy, and increased profitability.
RBI Governor Shaktikanta Das said, “The non-banking financial companies (NBFCs) also displayed strong financials in line with the banking sector. Notably, the gross non-performing assets (GNPAs) of scheduled commercial banks (SCBs) and NBFCs are below 3 percent of total advances as at end of March 2024.”
Role of Financial Reforms
According to the Finance Ministry, various reforms like the Insolvency and Bankruptcy Code have helped improve the financial stability of banks and reduce bad loans, thus decreasing the overall NPA (Non-Performing Assets).
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