The State Bank of India (SBI) belongs to the people of India, Finance Minister P Chidambaram said on Sunday while inaugurating the bank's 10,000th branch in Puduvayal- making it the second in the world to have as many branches.
The launch of the branch at 9 a.m. in Puduvayal in Sivaganga district, Chidambaram's constituency, was accompanied by the playing of traditional musical instruments like Tharai and Thappattai.
The 202-year-old SBI "belongs to the people of Bharat", the minister said, recalling how in 1970 it was then prime minister Indira Gandhi who had nationalised banks to bring them to the people.
"Remember Indira Gandhi whenever you take loans and repay them," Chidambaram told the audience.
"Ten thousand branches is no small achievement. Now Puduvayal will be known to the entire world," he remarked. A Chinese bank is the only other in the world to have so many branches, he said.
A small panchayat (village council) town in the Chettinad region, Puduvayal is well known for its rice mills and the Friends Volleyball Club. Puduvayal means 'new farm' in Tamil.
SBI'S total business from income and after expenditure is Rs.9 trillion (over $200 billion), the total income after expenditure of the government of India is Rs.8 trillion, Chidambaram noted.
"If we compare, the SBI chairman should be more powerful than the finance minister," Chidambaram remarked in a lighter vein. SBI chairman O.P. Bhatt was also present at the inauguration ceremony.
The SBI needs capital infusion of Rs.160 billion and "the government has provided it Rs.100 billion. With this additional inflow, SBI now has the capacity to do business of Rs.11.6 lakh crore (Rs.11.6 trillion)," he said.
This is the second rural bank branch Chidambaram launched in Sivaganga after presenting the 2008-09 union budget. On Saturday, he opened the 2,956th branch of Bank of India at Kundrakudi in the same district.
Chidambaram said that the United Progressive Alliance (UPA) government had played an important role in making banks more proactive.
"After the UPA government came into power, it has asked banks and insurance companies to be pro-active...to go to the people and sell the loans and policies. Today nationalised banks and insurance companies do that," the minister noted.
There are 110 million farming families in India, Chidambaram pointed out, "but half of them do not have any bank account. Seventy-five percent of India's people do not have insurance cover".
"What is the use of having more than 20 nationalised banks and four government owned non-life insurance companies?" he asked, saying that "these institutions have to reach the people".
"The UPA government has been doing that for the past four years," the minister said.
He recalled that education loans were rarities four years ago. But "today the education loan portfolio is Rs.16,000 crore (Rs.160 billion), going to over 10 lakh (1 million) students...just look at the spread now".
Chidambaram pointed out that a pilot project of the Indira Gandhi Rural Housing scheme was first implemented in Sivaganga that gave a rural family a government subsidy of Rs.35,000 and banks were told to give home loans of Rs.20,000 each at just four percent interest.
The Sivaganga housing project is now ready to be implemented across the country, he said.
"I am looking at India through the prism of Sivaganga," remarked Chidambaram, who has been actively seeking lowering of home lending rates.
Through the Aam Admi Bima Yojna (insurance for the common man), the Life Insurance Corporation (LIC) will cover 10 million families, the finance minister said. He promised that in due course of time, every below poverty line (BPL) family would be included in the scheme.
"Similarly, all BPL families will be included under health insurance."
The health insurance project will first be implemented in Delhi and in Rajasthan from this April, the minister said.
On the loan waiver announced for farmers, Chidambaram said: "The people of India are indebted to the farmer. The way to look at the Rs.60,000 crore farm loan waiver is as India repaying its debt.
"Without the farmer there can be no country. Without the farmer and food security, India cannot be a super power," he asserted.
"I hope people will support the waiver and help India's four crore (40 million) farming families," he added.