Delivering her address at the 74th Annual General Meeting (AGM) of the Indian Banks' Association (IBA) in Mumbai, Finance Minister Nirmala Sitharaman on Sunday said that banks will derive benefits of a vibrant economy going forward, however, India needs not only more but bigger lenders to meet the changing requirements owing to the new challenges that have emerged recently.
"We need 4-5 more SBIs in this country," she said during her address.
"The way in which the economy is shifting to a different plane altogether and the way industry is adapting, many new challenges have risen. It came to fore that India needs not only more, but bigger banks," said Sitharaman.
"We need to scale up banking to meet changing requirements in light of the shifting recent realities of the economy and industry," she added.
The FM said that the government wants lenders to spend more time thinking about the future of Indian banking system.
"Long term future of Indian banking is going to be largely driven by digitized processes. Beyond amalgamated banks, different banks who are not amalgamated, systems of different banks should be in a way that they should be able to talk to each other," she said.
Talking about the formation of bad bank, she said National Asset Reconstruction Company is not a "bad bank" like the one in the US.
NARCL will work speedily to resolve bad loans, she said, adding that the burden on the government to recapitalise PSBs will be lower.