Financial institutions need to be more people-centric for next 25 years: FM

For the next 25 years, we (financial institutions) have to be a lot more people-centric and try to see what they want, said Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Thursday exhorted financial institutions like Sidbi to be more people-centric in the next 25 years so that the economy moves to a higher growth path.

The government has termed the next 25 years leading to the 100th anniversary of India's independence as 'Amrit Kaal'.

"So for the next 25 years, we (financial institutions) have to be a lot more people-centric. Try to see what they want...

"It will attract people belonging to that (backward) region to be drawn back and if we can give them a perspective, which is good enough, I think we will be addressing a major problem related to human resource and also awaken those capacities which are lying dormant in the regions," she said while addressing the 3rd National Microfinance Congress here.

Many of the states have lot of current account and savings account (CASA) funds which are not effectively deployed in those regions because there are no big businesses, she said.

As a result, she said, impression that one gets is that CASA funds from those states move to business-rich areas which can absorb that kind of money.

"Now that gradually can lead to a situation where our savings are not being used for our business, entrepreneurship development," she said.

It should be the job of institutions like the Small Industries Development Bank of India (Sidbi) to spur credit growth and help develop the entrepreneurship ecosystem in backward regions, she added.

Observing that there is definitely a reshaping of the economy taking place post-COVID, she said people are now opting for entrepreneurship.

Citing the example of the 'One District, One Product' scheme, she said it is taking off very well.

The main philosophy behind the scheme is to select, brand and promote one product from each district which is unique to that district, which will boost employment and contribute to growth.