Summary:

In a recent interview, Finance Minister Nirmala Sitharaman emphasized the importance of scheduled commercial banks focusing on core banking activities rather than high-risk long-term project financing. She highlighted the need for banks to stick to their fundamental banking functions and avoid getting involved in ventures that could lead to potential risks.

Table of Content:

Importance of Core Banking:

Sitharaman stressed on the significance of scheduled commercial banks sticking to their core banking business rather than venturing into high-risk long-term project financing. She mentioned the need to effectively utilize resources acquired through CASA for better service, especially in regions with high deposits but low lending activities.

Role of NaBFID in Long-term Financing:

The Finance Minister highlighted the establishment of the National Bank for Financing Infrastructure and Development (NaBFID) for long-term financing, aiming to prevent banks from engaging in long-term funding with short-term borrowed money and avoiding asset-liability mismatch.

Next Phase of GST Reform:

Sitharaman discussed the impending rate rationalization in the GST framework, emphasizing the need for this reform to commence soon. She also mentioned the implementation of a new KYC system aimed at curbing tax evasion through early identification of shell companies.

Inclusion of Indian Bonds in Global Indices:

The Finance Minister expressed confidence regarding the expected surge in inflows following the inclusion of Indian bonds in global indices. She mentioned that while there might be fluctuations, the decision to open up to foreign investments was made after careful consideration and groundwork.

SEBI’s Suggestions on Crypto Regulation:

Sitharaman responded to reports on SEBI’s recommendations for regulating cryptocurrency, stating the government’s stance on the matter. She emphasized the need for a global consensus on crypto regulation, highlighting that individual efforts by countries might not yield effective results without international cooperation.

“Use resources you are getting through CASA (Current Account-Saving Account) effectively, so that you better service CASA and especially from eastern States.“Nirmala SitharamanFinance Minister