Growth in banking sector a great achievement: Chidambaram

Expressing happiness over the growth of the banking sector in the last 10 years, Finance Minister P Chidambaram today described it as a great achievement of the United Progressive Alliance rule.

Participating in the '103rd Foundation Day Celebration' of the Central Bank of India in Madurai he said: "The very fact that people have accepted the growth of banking sector as a normal phenomenon is a success to me and the government."

The celebration function is being organised for the first time outside the metro cities.

He said the government had made great efforts to achieve this growth in the banking sector.

"The bank officials including the Executive Directors, Chairmen and the Employees also played a major role in the expansion of the banking sector."

"Now the country is having 1,10,000 branches, and every year 7000 to 8000 branches were opened in the last nine years and this year 10,000 branches will be opened.

"The central bank to commemorate its 103rd foundation day has opened 103 branches today and it will open a total of 231 branches this year," he said.

Besides bank branches that had been opened, banking service had expanded at a fast pace.

ATM facility, which was available in a few localities, is now available throughout the country, he said.

"Very few thousand students got education loans 10 years ago.

“Now lakhs of students were availing the education loan. crores of Self-Help groups were availing loans.

"This is how the banking service has expanded," he said.

Another outcome of expansion was provision of jobs, he said adding if ten banks were being opened this year, then thousands of persons would get bank jobs.

"The expansion benefited lakhs of people in various sectors and we are proud of that", he said.

Chidambaram said another novelty introduced by the UPA government that benefited the public at large was the Corporate Social Responsibility Clause introduced under the new company Law. Some people opposed it initially, but they understood the benefits later and supported it, he said.

Under the CSR, a company - private or public sector - should allocate a percentage of profit for benefit of the community.

"It is a revolutionary clause. If the government has to spend money for any scheme then questions would be raised for various reasons.

"Now we have given freedom to the companies to spend the two per cent of the profit as they liked.

"They can lay a road, spend money for a school for any other common facility or provide health insurance for the poor people etc."

He said about Rs 20,000 crore (Rs 200 billion) was being spent under the CSR by various companies for implementing welfare schemes for the people. "But for the new company law replacing the 60 year old law, this would not have happened," he said.

Chidambaram said it is a matter of pride that Central bank of India was founded by two Indians -- Sorabji Pochkhanawala with Pherozeshah Mehta.

In fact one of the founders was working for a foreign bank, and his officer said it would not be possible for the Indians to start and run a bank.

The Central Bank of India was started and run by Indians during the colonial period, he said.

To mark the 103rd foundation day of the bank, Chidambaram also inaugurated 103 ATMs besides providing assistance to 103 government schools which were provided fans, among other facilities.

He also launched the 'EMV Rupay debit card' that would enable one to draw Rs 40,000 a day and a Health insurance scheme for 1.03 lakh (1,03,000) poor people on payment of Rs 611 a year.

Under the scheme, the bank has tied up with Chola MS General Insurance for providing medical reimbursement to the tune of Rs.30,000 in case of accidents or hospitalisation.

Image: P Chidambaram