The Union government was looking to sell its 30.48 per cent stake, and LIC was looking to sell its 30.24 per cent stake in the bank.
Additionally, Sitharaman said a committee of bankers is looking into whether to allow exclusive distribution tie-ups for selling third-party products by banks or adopt an open architecture approach. This also put pressure on SBI Life’s share price on Friday, with the insurer’s shares closing 3.29 per cent lower at Rs 1,767.30. SBI Life has an exclusive tie-up with the country’s largest lender for selling life insurance products.
“These are things which the committee under the IBA chairman will be sitting and working on. The IBA chairman, along with the IBA, will be talking to banks to understand how best to go about it, what are the vulnerabilities by keeping one, by keeping several — all these are going to be worked upon,” she said.
Sitharaman was speaking on the sidelines of an event to inaugurate SBI’s new local head office (LHO). The LHO will serve the bulk of Maharashtra, except the Mumbai metropolitan area and the Konkan region, which will continue to be served by the LHO in Mumbai.
Recently, the issue of the open architecture model came into focus after reports of M Nagaraju, secretary in the Department of Financial Services, asking banks to avoid exclusive tie-ups with their own insurance subsidiaries and instead remain neutral. Among insurers, SBI Life derives almost 60 per cent-plus of its business from the bancassurance channel, and a substantial part of that is from SBI.
Shares of SBI Life tumbled 3.29 per cent today. The broader market was down 1.29 per cent.
Additionally, she said the high-level committee on banking that was announced in this year’s Budget will examine how Indian banks need to evolve to meet the challenges of 2047, and what kind of growth is required for the sector to reach that goal.
“Their recommendations will guide how Indian banking may need to be refashioned, if required. The focus will be on addressing the need for future-ready banks — large institutions that understand the needs of the Indian economy,” she said. The terms of reference of the high-level banking committee and the members have not been announced yet.
Sitharaman also highlighted that amid global market volatility driven by geopolitical conflicts and tariff-related concerns, India’s domestic consumption story has remained resilient, sustaining economic growth that continues to be the fastest in the world. However, for this growth momentum to be sustained going forward, there is a need for consistent and predictable support from banks across sectors of the economy, including domestic manufacturing, agriculture, information technology, and related services, the minister for finance and corporate affairs said, adding that while Indian exporters have been impacted somewhat due to ongoing geopolitical issues, they have been able to find newer markets.
“When you look at India’s size and its aspirations, it is important to recognise that the Indian consumption story must be sustained. India’s economic growth is driven by domestic activities such as agriculture, which may also export products, but for it to grow strongly, the support extended to domestic agricultural growth is a very important factor. Similarly, the same applies to manufacturing and services,” she said.
“Unless domestic manufacturing, agricultural growth, tourism, and the IT and related services sectors are given constant and predictable support, it will be difficult to sustain India’s growth story. In this, banks have a very important role to play,” she added.
India’s economy grew 7.8 per cent in October-December from the same period a year earlier, down from an 8.4 per cent expansion in the previous quarter. For the full fiscal year ending in March, the government expects the economy to have grown by 7.6 per cent. At this pace, India remains the fastest-growing major economy globally.
Separately, Sitharaman highlighted that the systems of domestic banks, which so far have protected consumers, may not be sufficient to deal with new challenges emerging over Anthropic’s Claude Mythos system and its potential implications for financial data security.
Sitharaman, this week (Thursday), convened a high-level meeting with heads of banks to assess emerging cybersecurity risks linked to advanced artificial intelligence models, amid global concerns over Anthropic’s Claude Mythos system. During the meeting, Sitharaman asked banks to take all necessary pre-emptive measures to secure their IT systems, safeguard customer data, and protect monetary resources. Banks were further advised to immediately report any suspicious activity or cyber incident to the relevant authorities, including the Indian Computer Emergency Response Team (CERT-In), and to maintain close coordination with all agencies concerned.
During the meeting, the finance minister urged the Indian Banks’ Association (IBA) to develop a coordinated institutional mechanism to respond swiftly and effectively to any such threats. Banks were also directed to engage the best available cybersecurity professionals and specialised agencies to continuously strengthen the defensive and monitoring capabilities of banks.
“It has always been the case that banks in India, due to increasing digitisation over the decades, are adequately prepared for challenges arising from technology-related risks. Measures such as firewalling systems, periodically upgrading infrastructure, and introducing new applications for customer safety, security, and privacy are part of an ongoing exercise. Indian banks have performed very well in this regard, with no major incidents over the decades. Each time, they have stayed ahead of the curve,” Sitharaman said on Friday.
“However, a new challenge has emerged in the form of Mythos. Not much is known about it yet. The Ministry of Electronics and Information Technology (MeitY) is actively engaging with authorities and governments across the globe, as well as with technology companies, to understand how this will evolve and what kind of preparedness is required in India. Yesterday’s meeting was held in this context.
While banks have so far demonstrated that they are careful and protective of their customers, this may not be sufficient going forward.
There is a need for new and more versatile measures to counter emerging threats. In this regard, I held a meeting with all the banks. They have now been asked to work together actively,” she said, adding that under the aegis of the Indian Banks’ Association (IBA) in the coming weeks, there will be extensive interactions among banks to assess where further investments are needed, what new technologies can be introduced, and how artificial intelligence can be leveraged to counter these challenges.
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