Taxpayers kept you afloat, your duty now to build economy, FM tells banks

Finance Minister Arun Jaitley on Saturday said that Indian taxpayers were making a sacrifice to keep the banking system in good health and hence the performance of banks would be under the lens over the next few years.

He said the government's Rs 2.12 trillion recapitalisation plan was to keep banks in good health, which was "extremely" important for the economy.

"The tax payers in India are making a sacrifice to keep the banking system in good health. This money which is being infused could be used in other social purposes. But that is the money being infused into the banking system to make sure that you are kept in good health so that you (banks) are able to improve the credit growth and growth processes in the country," Jaitley said at the 75th anniversary celebration of the UCO Bank.

"The society through tax payers is reviving you. So it is your responsibility to come out with a much faster pace and in much better health so you are able to give a much more robust economy."

"And therefore the next few years, your performance is really on test," he said.

Jaitley said it was the responsibility of the banks to support and spur growth in India. He added a turnaround in the economy was now visible after various structural changes undertaken by the government which led to a "transient hiatus".

"The lending that the banks do is an indication of how growth will move. The latest data has shown that credit growth has moved up. And once this infusion of capital takes place into the banking system, credit growth will further go up.

"And when that goes up, coupled with the revival of the global commodity prices, one should really visualize a better future from the current challenges," he said.