Niti Aayog vice chairman Rajiv Kumar has said that India needs three-four large lenders to figure among top 200 global-sized banks. He also noted that India's banking sector is highly conservative. He made a strong case for giving banking sector more freedom to take risks and provide credit to industry especially the Micro, Small & Medium Enterprises (MSME) sector.
Kumar also pointed out that its risk appetite is minimal and its capacity of project assessment is not as much it should be, so it takes recourse to safe banking. Adding further, he said that the Reserve Bank of India (RBI) should refrain from over regulation and encourage banks to take risks and increase exposure to the MSME sector.
Niti Aayog vice chairman has stated that the central bank should take steps to enhance the lending capacity of the banks. He noted that India's credit-to-GDP ratio is very low compared to many countries. Observing that 86 percent of the loans are given to the big companies, he said there is an urgency to increase credit MSME sector, start up and entrepreneurs.