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With AI and blockchain, RBI should study new banking structure to finance future needs: PM Modi

Mumbai (Maharashtra) (India), April 1 (ANI): Speaking at the 90th anniversary celebration of the Reserve Bank of India (RBI), Prime Minister Narendra Modi on Monday asked the central bank to evaluate a new banking structure to finance the future. needs.

Prime Minister Modi said an assessment of credit requirements should be carried out by the RBI, keeping in mind the growth prospects and potential of the country.

Modi said there may be a need for new methods of “financing, operating and business models” in a changing landscape. The banking sector must move forward to ensure that it can finance the credit requirements of projects necessary for the future growth of the country. “The Prime Minister said that the sector is facing challenges and artificial intelligence and blockchain are changing the face of the banking sector. “In such a situation, we need to think about what changes will be required in the banking sector of the country and in its structure,” he said.

The RBI ceremony was attended by Indian dignitaries such as Reliance Group Chairman Mukesh Ambani, Tata Sons Chairman N Chandrashekaran and Mahindra Group Chairman Anand Mahindra, along with the country’s top bankers.

Prime Minister Modi also asked the RBI to assess the country’s credit needs, keeping in mind India’s growth prospects and potential.

Prime Minister Modi did not mention corporate ownership in banks, which has been a contentious issue in the past, but asked companies to inject necessary capital to meet the financing needs of the economy.

Former RBI governor Raghuram Rajan and then deputy governor Viral Acharya flagged the risk of conflict of interest in such a structure in which corporate or large industrial firms own lenders. Some large companies have unsuccessfully applied for a universal banking license.

In 2020, an RBI task force suggested that the rules be changed to allow big companies to promote banks, but the central bank has not taken a decision on this. Currently, large corporations have favored non-banking financial companies as part of their strategy in the financial sector.

Amid concerns over the high debt-to-GDP ratio of the private sector in many countries, Modi suggested that the RBI undertake a study in the Indian context. Modi said India has become the engine of global growth with a contribution of around 15 percent to the incremental global growth. (ANI)

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