Banking will become premise-less, paper-less with help of technology: PM Modi

New Delhi - Prime Minister Narendra Modi on Monday said the government has initiated a series of banking reforms including re-capitalisation of PSU banks, change in rules for hiring top management and paper-less transactions to curb the black money menace. The Prime Minister said the entire banking sector is undergoing major transformation with the advent of latest technology. “The banking sector is seeing changes. Mobile banking is coming up. Banking will be premises-less and paper-less,” he said at the launch of IDFC Bank here. [caption id=“attachment_2465342” align=“alignleft” width=“380”] PM Modi. PTI[/caption] Modi further said India is slowly moving towards a situation where the currency printing cost will come down. “We have to take the country in that direction. As we use technology, we move to paper-less banking, currency-less business operations; the possibility of black money will gradually become negligible,” he said. He also stressed the need for banks to focus on rural areas as they have immense potential. The Prime Minister also listed out the seven-point agenda to improve operations of the state-owned banks. It includes capitalisation, setting up of Bank Board Bureau and introduction of a framework for accountability. “We have decided to bring improvements in the appointments at the top levels of the banks. This improves efficiency,” he said, adding private sector professionals have been hired in PSU banks after nationalisation of banks in 1969. Noting the massive stressed assets, or bad loans, of state-run banks, Modi said the government would be infusing Rs 70,000 crore in the PSBs in the next few years. “Bad loans in the past few years are a problem but we can’t only cry about it. We are trying to solve this problem,” he said at the launch of IDFC Bank in New Delhi. “That is why, the government would be infusing Rs 70,000 crore in the public sector banks in the next few years to help them deal with the bad loans crisis,” he said. He also said import duties have been hiked on certain items to help the sectors facing problems and account for distress assets of the banking sector. The prime minister said the banking sector is poised to achieve a big boost in growth in rural areas. He said this would be similar to the growth achieved by the telecom sector some years ago. Modi complimented IDFC for its successful journey of 18 years so far, and said that it was now embarking on a more challenging role, as it expands into banking, especially in the rural areas. He said that from helping to build infrastructure, the organisation is now progressing to building lives. Amid continued concerns about levels of non-performing assets (NPAs), or bad debts, of public sector banks, Finance Minister Arun Jaitley had said last month in Mumbai that the government may consider reducing its stake in them to 52 percent. Taking the first step towards a holding company structure for state-run banks, the government, in August, announced the setting up of a Banks Board Bureau (BBB) that will recommend appointment of directors in PSBs and advise on ways of raising funds and dealing with stressed assets. Jaitley has allocated Rs 7,940 crore in the budget for recapitalisation of public sector banks in this fiscal. The union cabinet had in December allowed state-run banks to raise up to Rs 160,000 crore from the capital markets by diluting the government stake in phases to 52 percent. As per estimates, public sector banks would need additional capital of up to Rs 240,000 crore by 2018 to meet the Basel III capital adequacy norms, put in place to guard against a repeat of the situation following the 2008 US financial crisis. Agencies