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Build Global Institutions, Modi Tells Indian Bankers

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Prime Minister Narendra Modi has called on the Indian banking sector to establish banks that rank among the top global financial institutions, saying banks need to be run professionally.
 
Modi said he is against any political interference in the functioning of banks but supports necessary "intervention" in the public interest.

"The banking sector of a country mirrors its economic rise. Japan and China had banks in the top ten banks of the world during their economic rise," he said.
 
But he said "accountability is essential" in the sector and demanded an end to "lazy banking."
 
The prime minister was speaking in Pune on Saturday on the last day of the two-day bankers' retreat "Gyan Sangam".
 
India's top bankers gathered in the city to discuss long-pending reforms vital to improving the health of ailing public sector banks in Asia's third-largest economy.
 
Modi said he supports political intervention only in the interest of the people.
 
"Political intervention will enable the voice of the common man to reach such institution," he said.
 
Financial Services Secretary Hasmukh Adhia said the Prime Minister told bankers that they will not receive calls from the Prime Minister's Office (PMO) about their decisions.
 
Modi took to mythology to underscore a need for building adequate knowledge capacities in the banking space, saying that Laxmi - goddess of wealth - would stay longer when combined with Saraswati, who is worshipped for knowledge.
 
"Prime Minister said it is not important to worship only Laxmi, because Laxmiji is 'chanchal'," Adhia told reporters, quoting from Modi's address.
 
"If you combine Saraswati and Laxmi, then Laxmi stays for a longer time," Adhia said.
 
Modi in his speech asked the banks to develop dedicated teams to fight cyber crime and also highlighted the issue of poor financial literacy in the country.
 
The two-day retreat was attended by top bankers, including State Bank of India Chairperson Arundhati Bhattacharya. It was addressed by Finance Minister Arun Jaitley as well as Reserve Bank Governor Raghuram Rajan.
 
Greater Autonomy
India needs to "conceive" several reforms in the banking sector, Jaitley told reporters on the sidelines of the banking retreat.
 
Jaitley added that there is a need to give greater autonomy to banks and that non-performing loans in some cases was "unacceptable".
 
"There is a need to get the best talent into the system. There is a need for far greater autonomy being given to them (state-run banks)," Jaitley said.
 
India's state-run banks recorded the highest level of stressed loans at 12.9 per cent of their total advances in September last year, while the same ratio for private sector banks was at 4.4 per cent, according to central bank data.
 
Banks have suggested reducing government's holding in state-run banks to below 51 per cent, the Finance Ministry said on Saturday.
 
The Modi administration last year approved a plan to pare the government's stake in state lenders to up to 52 per cent to help them meet their capital needs.