Speech by Hon'ble President of India, Shrimati Pratibha Devisingh Patil, at the Inauguration of the Platinum Jubilee Celebrations of Bank of Maharashtra at Pune

Ladies and Gentlemen,

Last year, on this day, terrorists attacked Mumbai. India was outraged at their audacity as they killed innocent people. Government is committed to bring the perpetrators of this inhuman act to justice. I take this occasion to pay homage to all those who lost their lives in the attacks and the brave security personnel who laid down their lives.

I am happy to be participating in the Platinum Jubilee Celebrations of the Bank of Maharashtra which since its inception in 1935, has worked with dedication to serve its customers. As a result it has progressed well. I am told that it has about 12 million customers and over 1300 branches across the country. I take this opportunity to congratulate the Bank, its management, and employees for their achievement in building the reputation of the Bank of Maharashtra.

The banking sector in India, apart from catering to the banking requirements of the country, has played an important role in our socio-economic development. Today, our banks are not only adequately capitalized and well regulated but are also sound and resilient. It is for these reasons, coupled with our large domestic market and timely policies, that the Indian economy weathered the global downturn rather well.

The financial crisis, an outcome of the sub-prime crisis, toxic assets, over-leveraged derivatives and excessive greed, led to a series of business and bank failures predominantly in the Western countries. This further caused turmoil and turbulence in financial markets across the world, lowering both market confidence and growth patterns. It sharply drew attention to the fact that in a globalized and inter-connected world, a crisis can be transmitted from one country to another through the many channels of trade, capital and information flows. The situation alerted policy-makers to the task of re-examining designs of national regulatory frameworks and the global financial architecture. Major global economies at the G-20 meetings, the Financial Stability Board and the Basel Committee on Banking Supervision agreed to take co-ordinated action. Fiscal and monetary stimulus packages by countries sought to infuse sufficient liquidity into the system so that the lack of bank credit did not further dent confidence levels. This response was, in a way, an acknowledgement that the financial sector plays a crucial role in economies and that banks form the core of the financial system.

The global economy is recovering. World focus has shifted from managing the crisis to managing the recovery. Many steps are necessary before we achieve pre-crises growth rates. The Indian economy after, a period of deceleration, is now turning around with industrial production increasing and activity picking up in other sectors as well. Banks will continue to play a role in the phase towards sustained growth also. They must fulfill their basic role of keeping money in circulation in a responsible and regulated manner as they look at ways and means to enhance their efficiency and productivity while ensuring economic stability.

Bankers and money managers the world over and, therefore, also in India have a responsibility to follow principles of prudence and risk-management, particularly because banking is not just a place where money is kept in deposit. Banks also invest for a customer, whose money they must not expose to unnecessary risks.

The Government of India has launched a number of infrastructure development programmes. Several social welfare schemes are being implemented as part of our inclusive growth model for achieving an equitable and stable economy. Banks have a significant role in fulfilling this vision. In this context, I would like to take this opportunity to point out a few areas and principles which the banking sector must constantly keep in mind.

Needless to say, the first priority of the Indian banking system must be to strengthen itself significantly to support a modern, vibrant and inclusive economy. No doubt, the banking system in the country has grown considerably but yet even today the challenge is to reach the unbanked areas and make banking services available to individuals who still do not have access to banking facilities. I am informed that available data indicates that about 73 percent of rural households have no access to formal sources of credit. This creates a situation where people can become victims of moneylenders who charge them very high rates of interest. Banks must reach out to this segment of the population and, thereby, ensure the financial inclusion of every individual. Extending credit to farmers for their agricultural activities is important for improving productivity levels that will bring economic benefit to the farmers and at the same time contribute to the national goal of food security. I am aware that the Bank of Maharashtra is giving Kisan Credit Cards. I hope that the Bank engages itself on a larger scale with farmers, advising them how while taking loans they can look at supplementary agricultural based activities so that they do not fall into debt-traps.

Government has undertaken a number of schemes in rural areas like the National Rural Employment Guarantee Scheme to ameliorate the situation of seasonal unemployment or paying pension to widows, among others. Banks could play a very important role in the proper disbursement of the money to the beneficiaries by opening accounts of all beneficiaries. Economic development of rural areas is fundamental for a surge in our growth rates. I was happy to inaugurate the Bank of Maharashtra's branch at the model village of "Hiware Bazar". I convey my congratulations to both the residents of Hiware village as well as the Bank for this step. I would urge all banks to consider adopting villages so that more and more villages through the support of their banks can become model villages.

Many people in India have demonstrated an aptitude for enterprise and business, achieving great success. It is very important for a bank to extend credit facilities to entrepreneurs to set-up their own ventures. Increased business activities will generate jobs and propel growth. Efforts must continue at all levels to maintain the flow of credit for meeting needs of trade, commerce and industry.

Small and medium enterprises have the advantage of giving opportunities to do business to those who do not have access to big finance, but yet they have the potential of producing quality goods and generating employment opportunities on a large scale. They should be given attention and financial support by the banks. I hope that the Bank of Maharashtra will move swiftly and widely in this direction.

I am happy that the Bank of Maharashtra is acting as a conduit for women's empowerment programmes, especially their economic empowerment, by financing Self Help Groups. When we empower one woman, we empower the entire family. I look forward to more such initiatives from the Bank of Maharashtra. I also wish success to the Bank's endeavour to take the strength of SHGs sponsored by it from 50,000 to 75,000 as part of its Platinum Jubilee celebrations.

Banking is a service, which demands that every effort be made to develop facilities and products that respond to the needs and expectations of customers. In extending customer care, the principles of reasonableness in pricing, customer appropriateness, confidentiality, and effective grievance redressal machinery are essential. The effort should be to make the banking industry become more customer-friendly and customer-centric in its conduct and business practices.

Banks can use technologies to provide their customers better facilities whether it is the ATMs or Internet Banking through which clients can transact their banking business at a convenient time from the comfort of their home or office. Operating in an inter-woven global economy should spur Indian banks to attain high standards so that they can compete with the best in the world in providing customers services.

The basic purpose of setting up of the Bank of Maharashtra by visionaries like the late Professors V. G. Kale and D. K. Sathe was to serve and meet the expectations of the common man for economic freedom. I encourage the Bank to be vibrant, forward looking and serve diverse sections of society as it strives to be everyone's Bank for every banking need. I wish the Bank success in fulfilling this vision.

Thank You,  
Jai Hind.