Cautioning that the economy is passing through turbulent times, finance minister Pranab Mukherjee today

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asked banks to maintain a strict vigil on the quality of their loan portfolio.

"The commitment to moderate levels of inflation has led to higher interest rates. In this environment, banks need to keep a strong vigil on their asset quality. These are turbulent times and we should watch every step that we take," Mukherjee said at 106th foundation day of Bank of India here.

"The global economy is still trying to cope up with the after effects of the financial crisis...But this should not prevent us from taking bold and innovative steps," he said.

On the skilled human resource crunch faced by public sector banks, Mukherjee said, the process of replacing the experienced banking professional in the nationalised banks is challenging. The replacement process has already begun, he added.

He said getting the right talent is one part of the problem. The other part is to inculcate the organisational culture amongst the new recruits so that their integration with the organisation becomes truly "seamless".

"Banking is no longer a simple trade, it is now complex and knowledge based. We need to constantly train our people and groom them for further leadership roles," he said.

Highlighting the importance of financial inclusion, the Finance Minister said, the Government firmly believes that it is necessary condition for inclusive growth.

The public sector banks have to play an important role in financial inclusion in the country given the distribution platform they enjoy and experience they have in serving the rural hinterland for the past five decades.