India Revival Mission: Banks Turning Risk Averse, says Sunil Mehta  |  Photo Credit: BCCL
New Delhi: On ET Now’s India Revival Mission series, Sunil Mehta, chief, Indian Bank Association (IBA) said that “I don’t think that it is the job of the central bank or a regulators job to come and start lending the sector. Because it is the banking sector which has got the expertise and relationship with the individual customers in different enterprise.”
“One thing I can tell you that it is not only a problem with the banking sector, but it is also an overall problem with the economy. You on lockdown for two months and don’t have any economic activity coming up. So, bankers also need a proper ground rule. Because bankers are basically custodian of public money. They have developed there own risk models and systems based on which they have to lend to the entire economy,” he added.
On speaking about why are banks still wary of lending, he said: “There are two different things. The banking system has some pre-determined systems and processes for lending. Because banking is an intermediatory they have the custodian of the public money. So, they have to lend in such a way so that money is recovered.” He further said that this is not normal lending that is happening. So, to encourage these banks the government needs to come out with certain schemes.
Watch the full conversation here: