'Banks are being professionally run today, give credit to RBI, FinMin...': FM Nirmala Sitharaman 

Union Finance Minister Nirmala Sitharaman on Tuesday highlighted the strength of India's banking sector, emphasising that public sector banks are efficiently managed and do not rely on government funding. In her address in the Lok Sabha, she noted that all public sector banks are profitable, with a total profit of Rs 85,520 crore in the first half of the current fiscal year.

"Banks are being professionally run today. The metrics are healthy so they can go to the market and raise bonds, raise loans & run their business accordingly," FM Sitharaman said in the Lok Sabha. 

The finance minister noted the evolving landscape of the banking sector since 2014, emphasizing the positive changes witnessed over the past decade. She highlighted that Indian banks are now being managed with professionalism, a development that the nation should take pride in. Furthermore, she mentioned that banks no longer rely on the government for recapitalization, as they have demonstrated the ability to raise capital independently and issue bonds.

She added: "Look around and the world has lost their banks where regulatory systems are sound, the banks have failed. We can't have our banks struggling. We must credit RBI and FinMin for it. Since 2014, we are cautious that banks remain stable."

The finance minister also discussed the newly implemented Prime Minister Vidyalakshmi scheme, which offers loans up to Rs 7.5 lakh with a 75% credit guarantee. In addition, students from households with an income of up to Rs 8 lakh can receive loans exceeding Rs 7.5 lakh for higher education, with a 3% interest subvention for loans up to Rs 10 lakh. Full interest subvention will be granted to those with annual incomes of up to Rs 4.5 lakh.

Earlier in the day, Sitharaman introduced the Banking Laws (Amendment) Bill in the Lok Sabha, emphasizing that the proposed modifications aim to improve customer convenience. The minister highlighted that a total of 19 amendments are being put forth to update various Acts including the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.

"The proposed amendments will strengthen governance in the banking sector and enhance customer convenience with respect to nomination and protection of investors," Sitharaman said.

The Banking Laws (Amendment) Bill 2024 was passed in Lok Sabha late in the evening.