Press Information Bureau

Government of India

Ministry of Finance

21-October-2011 14:20 IST

Need for Better Co-Ordination Between Monetary and Fiscal Policies for Improving Overall Economic Stability and Growth : FM

The Finance Minister Shri Pranab Mukherjee has said that the present global economic developments and more particularly the sovereign debt crisis of Europe has once again brought into focus the need for better co-ordination between monetary and fiscal policies towards improving overall economic stability and growth. He was speaking on the occasion of the 81st Foundation Day Celebrations of Vijaya Bank .

Shri Mukherjee said that in recent times, global financial markets have been troubled by perceptions of inadequate solutions to the Euro area sovereign debt problem, exposure of banks to euro area sovereign debt and renewed fears of recession. Global recovery will also be affected by some of the fiscal consolidation measures being taken in some of the advanced economies, he said. The Finance Minister was happy to note that banking Sector in India has responded positively to meet the credit needs of the economy.

Shri Mukherjee said that it was indeed an achievement of Vijaya Bank that it was opening forty branches and eighty ATMs spread across the country, to commemorate its 81st Foundation day, taking the total number of branches to 1240 and ATMs to 643. The opening of four Urban Micro Finance Branches and adoption of 8 villages for providing basic amenities to the villagers alongwith opening of eight Rural Health care centres and computer training centres for the rural populace exhibits the efforts of Vijaya Bank in taking banking service to rural & unbanked areas, he said . He congratulated all officers & staff of Vijaya Bank for their efforts and said the bank is today one of the successful Public Sector Banks, with a total Business of over Rs. 1,32,000 Crores.

The Finance Minister Shri Mukherjee said that the Public sector banks have played a very crucial role in shaping the economic growth of the country and they constitute over 72 per cent of the banking sector assets in the country. He said that the concept of “Financial Inclusion” had its origin at least 35 years ago, when Regional Rural banks (RRBs) were established throughout the country. The total number of branches also increased from 8000 in 1969 when Banks were Nationalised to more than 87000 now mainly because of the banking industry taking up more social responsibilities. However, in spite of all this, there are still a large number of villages without any access to banking facilities, he said .

The Finance Minister Shri Mukherjee stated that with a view to extend banking services to all these areas of the country especially in the rural and semi-urban areas, banks were given a mandate to make the best use of technology and implement Financial Inclusion Plan to reach all habitations with a population of 2000 and above amounting to 73000 before 31st march 2012. He was glad to note that Vijaya Bank had already covered 281 villages under the Financial Inclusion Plan (FIP) compared to an overall target to cover 408 villages by March 2012 and had opened about 1.31 lakh smart card accounts.

Speaking on the occasion, Minister of State for Finance Shri Namo Narain Meena applauded the achievements of the bank and said that Vijaya Bank is one of the early banks to have introduced Core Banking Solution (CBS) in all its branches offering almost all the tech-savvy products and services to it’s customers such as , Mobile Banking, Internet Banking, On-line trading, SMS alerts, money Transfer through RTGS /NEFT.

In his welcome address, Shri H S Upendra Kamth, Chairman and Managing Director, Vijaya Bank, said that the bank was fulfilling the sacred responsibility of taking banking services to the doorstep of the “Aam Aaadmi” by way of financial inclusion.

On the occasion, the bank also launched 8 rural bus shelters, and adopted 8 girl students for education and computer training centre at Mangalore for underprivileged from rural areas.

DSM/SS/GN

Coordination between monetary and fiscal policies urged to bolster economic stability and sustainable growth amid global sovereign debt strains. Emphasis on enhanced coordination between monetary and fiscal policies to bolster economic stability and growth amid global sovereign debt pressures, coupled with reliance on the banking sector to sustain credit flow. Complementary measures include implementing Financial Inclusion Plans, expanding branches and ATMs, adopting technology such as core banking and mobile services, and targeted rural initiatives to extend banking access to underserved habitations.