Vice President Venkaiah Naidu today said the rising Non Performing Assets in the banking system is a cause for concern as mounting NPAs would affect banks’ capacity to lend.

Addressing the 125th foundation day function of Punjab National Bank in New Delhi, Mr. Naidu said, the accumulation of bad loans happened over a long period of time and now threatens to hamper economic growth by weakening credit supply. He said banks must constantly strengthen their internal processes to monitor funds and maintain strict discipline in lending.

The Vice President said that financial inclusion is at the heart of transformation. The banks should work towards further improving their services and work towards avoiding leakages. He said, India’s financial institutions have been lauded for being resilient and withstanding recessions.

He said, the banks are no longer just about strong lockers and good interest rates. They have transcended their conventional mandates and are now at forefront of India’s development story. He said, systematic reforms in the banking sector is the need of the hour to ensure inclusive growth.

Mr Naidu said, India’s banking sector is poised for robust growth as the rapidly growing business and commerce in India would turn to banks for financial services.

He said, many positive trends like expansion of middle class and digital revolution have transformed the Banking. The Vice President said, digital revolution and latest technologies should be used in the banking sector so that people can avail most of the banking services through online.