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Prime Minister Narendra Modi on Friday stressed on increasing credit to businesses to meet the needs of a fast reflating economy, and said financial products will have to be tailor-made for fintech and startups.

He said that although the government’s endeavour is to promote the private sector, the public sector still needs to have their presence in banking and insurance to support the poor.

Speaking at a webinar on Budget announcements on financial services, PM Modi said that to help medium and small businesses during the COVID-19 pandemic, 90 lakh Micro, Small and Medium Enterprises (MSMEs) were given credit worth Rs 2.4 trillion.

“Supporting MSME and startups and expanding credit flow to them is necessary. The government has undertaken reforms and opened up sectors like farm, coal, and space. Now it’s the responsibility of the financial sector to understand the aspirations of rural and smaller cities and make them the strength of Aatmanirbhar Bharat,” he said.

“As our economy is growing, and growing fast, credit flow has also become equally important. You have to see how credit reaches new sectors, new entrepreneurs. Now you will have to focus on creation of new and better financial products for startups and fintech,” PM Modi added.

Stating that Kisan Credit has helped small farmers and those involved in animal husbandry to come out with the grasp of informal lending, PM Modi said the private sector now will have to think of innovative financial products for this section of society.

He said the government has a clear vision for the financial services sector, and is taking steps to make it vibrant, proactive, and strong.

“The pace at which we have to take the country forward in the 21st century, proactive participation of the private sector is important. The government’s vision is clear about the financial sector, no place for ifs and buts. The government’s highest priority is that every depositor and investor experience trust and transparency,” he said.

The trust is based on the safety and security of deposit and economic growth. There is a need to change the old policies relating to the banking and non-banking sector.

“The financial sector was hurt 10-12 years back due to aggressive lending. Steps have been taken to take the country out of non-transparent credit culture. Today, instead of brushing NPAs under the carpet, we have made it mandatory to report even NPA of one day,” he said.

He said the government is aware of the ups and downs faced by businesses and does not foster thinking that all business decisions are taken in bad intent.

“The government’s responsibility is to stand with all such business decisions taken with good intent and I want to say this to all those in the financial sector that I will stand by you for all decisions taken with honest intent,” PM Modi added.

In the 2021-22 Budget, the government proposed privatisation of two public sector banks, allowed 74 percent foreign direct investment in the insurance sector, and announced the initial public offering of Life Insurance Corp of India.

Elaborating on the Budget proposal of setting up an Asset Reconstruction Company (ARC), PM Modi said the ARC will address the bad loans in a “focussed manner”, and this will help strengthen PSBs and increase their lending capability.

He said 130 crore people have Aadhaar cards and 41 crore have Jan Dhan Account holders, of which 55 percent are women.

Stressing on the use of technology in financial inclusion, he said on average, Rs 4 lakh crore worth of transactions are being undertaken through UPI platforms every month, and there are 60 crore RuPay cardholders.

PM Modi said that today, all sections of society have access to credit and Rs 15 lakh crore have been extended through MUDRA Yojana. Around Rs 1.15 lakh crore have been deposited in 11 crore farmer families through PM Kisan Swanidhi Yojana.