Nationalisation of banks was a path breaking step in deploying financial services for transformation of the economy, finance minister Pranab Mukherjee said on Saturday and added that India needs to develop an integrated banking delivery model to promote financial inclusion and economic growth.
"A socially conscious banking system will help us to reduce the glaring inequalities without compromising economic growth. In this context, continuous innovation in delivery and design of financial services targeted at the economically marginalized is of utmost importance," he said after inaugurating a conference on 'Leveraging Financial Services Sector as the Growth Engine for Transformation' organised by the Indian Merchants' Chamber.
Mukherjee, however, pointed out that India's objectives are somewhat different from those of developed countries. "We need to indigenously develop a workable business model and an integrated delivery model geared to promote financial inclusion, and in turn, sustainable economic growth," he said.
Mukherjee emphasised that the future challenge in the evolving circumstances is to maintain the momentum of growth against the background of deteriorating global growth rates, sovereign debt crisis in Europe, the possibility of systemic impact of crisis in international financial markets and some domestic constraints.
He added that, in India, the process of leveraging financial services sector as the growth engine for transformation is closely entwined with the progress on financial inclusion.
"It is a subject which is close to my heart. Financial Inclusion is a key strategy to achieve inclusive development. It is a necessary condition for financial deepening, which will help us to address the basic issue of growth with equity," he said.
Mukherjee pointed out that the government and the Reserve Bank of India have taken a number of initiatives for furthering financial inclusion.