Finance Minister Nirmala Sitharaman said on Monday that banks should be more customer-friendly in their approach so that the use of credit becomes hassle-free.
Ms Sitharaman said this during a post-budget meeting with industry representatives in Mumbai, at the same time making it clear that banks don’t have to succumb to credit underwriting standards by taking adverse risks on a proposal.
During the interaction, there was a suggestion of a startup representative of credit available to worry-free, for which State Bank of India chairman Dinesh Kumar Khara said the concerns of a startup are more on the equity side and assured full lending support as his sufficient equity is on the table.
Ms. Sitharaman stressed that the person asking the question is a woman who runs an innovative venture, and had a few suggestions for the banking community and also spoke out against their stance.
“Initially, Mr. Khara gave a very lackluster answer. And when he got some prodding, he started talking about a scheme that has a lot of government support, the Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE),” she said. †
“Banks will have to be a lot more customer-friendly. Not to the extent that you take negative risks that you don’t have to take, but you have to be a lot friendlier to customers,” said the minister.
Mr. Khara said the focus is on increasing the dependency of end-to-end digitization of the process, which will ensure a hassle-free experience.
He said the bank will go all-digital for lending in the next two months. In addition, provided credible cash flow visibility is available to a bank, credit growth to small businesses over time can outstrip personal loans.