BANKING AND FINANCIAL SECTOR
Congress affirms its belief in a competitive banking and financial sector.
The BJP government has considerably weakened the banking sector in the last 5 years; there has been a sharp rise in non-performing assets; crony capitalism has thrived; and deserving sectors and individuals have been denied credit. Congress promises to reverse these developments.
- Congress promises a comprehensive review of the concept, role and functions of Public Sector Banks (PSBs) in order to make PSBs robust and competitive with healthy balance sheets.
- Congress will amalgamate 2 or more PSBs so that there will be only 6-8 PSBs with a national presence and reach. Each of the amalgamated PSBs will be adequately capitalised.
- We will undertake a comprehensive review of the governance structure of PSBs and implement changes to make the PSB an independent commercial banking organisation that is competitive, healthy, efficient and profitable. We will abolish the redundant Banking Board Bureau.
- Congress promises that PSBs will continue to implement policies to serve the larger public interest including lending to priority and other disadvantaged sectors that are denied adequate credit.
- We are concerned by the recent failure of some NBFCs that has affected the bond market, mutual funds and the flow of credit. Congress promises to review and strengthen the regulatory regime of NBFCs in order to prevent such failures and to restore investor confidence.
- We will take the necessary policy and administrative measures to develop a robust, deep and liquid corporate bond market, municipal bond market and infrastructure investment trusts.
- Congress promises to promote new Development Banks in order to provide long-term credit to development and infrastructure projects.
- Indian-owned new technology companies face a stiff capital barrier when they are poised to scale-up to global size and standards. Congress will set up an India Global Companies Fund and create a policy environment which will help and support Indian-owned companies in becoming global companies.
- Congress will encourage the establishment of State-level and Regional-level institutions, including small banks, to provide bank credit to MSMEs. Congress will also encourage State Governments to revive State Financial Corporations to provide long-term credit and risk capital to MSMEs.
- We will strengthen and technologically-enable Regional Rural Banks and Banking Correspondents to accelerate financial inclusion so that citizens are provided banking services in their neighbourhoods.
- Congress will work with the RBI to simplify the KYC process, avoid repetitive verification, and use a wider range of documents for the purpose.
- Congress promises to take necessary measures to develop a deep and broad securities market that will offer products that will attract more investors to the securities market, give them safe and adequate returns, and offer investment solutions to their long term needs.
- We will adopt policies to attract more investment — Indian and foreign — in our financial markets.
- We promise to take hard measures to prevent fraud in the banking, securities and financial markets (including money collection schemes) and deliver swift and deterring punishment to offenders.