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Greet Lakshmi the banking robot Bank deposits account for 46.3 per cent of household savings Ernakulam excels... Financial inclusion vs unclaimed deposits Smart banking in smart cities Targets continue to be ad hoc Nothing much can happen…. Governance in Reverse Gear? Small finance banks offer high interest rates How okay are new banks? New bank licences, at last... Banking on Risk Reaching out: is it slowing down? What is the priority – mergers or NPA reduction? Cradle of banks to a smart city... Cut in repo rate – lower than expected Drastic decline in asset quality Indian customers are tech savvy Capital base of regional rural banks raised Grows Bigger Small finance payment banks... Growing volume of stressed assets… Just 660 days! Target over-ambitious... LVB- A supermarket of financial services Well-lived... Monetary policy continues to adopt dis-inflationary path Why any time money? It’s a war on black money, support it. Managing NPAs... Aadhaar, niraadhaar and banking New capitals of Migrant banks Good, bad and ugly Perhaps small is more beautiful than big! The collaboration suite of cyber criminals Anytime banking to anywhere banking Drop in SLR- sparing lendable resources Another route for achieving financial inclusion Emerging crisis All that glitters is not gold... Stage set for Indian ‘avatar’ of foreign banks How ‘secure’ are the secured loans? United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu Payment banks have arrived Big bank merger, bigger expectations Banking overhauling or reorganisation? Fund healthcare clinics in villages... Two banks: their jubilees and performances A bank for women, by women Merger mania haunts banks Bottomlines shrink, bad loans rise... Mega merger is on From lazy banking to easy banking Who is the real beneficiary? Needed a Banking Atlas Small is ‘more’ beautiful Growing gainfully Cautious and considerate Hesitancy in announcing year-end results Too big to fail and too small to sail Why priority status? Insatiable appetite for credit Rationalised Holy or unholy? Lacklustre credit expansion One down in private sector A development bank for BRICS Ferrying digital banking to Lakshadweep A new development bank rising in the east… The paradox: clamour for the Goliath and David Reaching the Unreached… Banking in Telangana Thirty more cities seek to become SMART
 
Reaching the Unreached…
The banking juggernaut in India has moved swiftly, thanks to the directive given by the Prime Minister to reach the unreached.

Financial Inclusion has been talked about at various levels during the last couple of years, perhaps not with the seriousness it has acquired. Pradhan Manthri Jan Dhan Yojana (PMJDY) launched throughout the country, opened banking doors to millions of Indians who till then never banked.

Banks were directed to open 7.5 crore new bank accounts by 26 January, 2015. The main features of PMJDY scheme include an overdraft facility of Rs.5000 for Adhar-linked accounts. Besides this, it also offers facilities of RuPay Debit Card with inbuilt Rs. 1 lakh accident insurance cover.

According to available preliminary reports relating to the achievement made in opening new accounts, the banks have as of 8 September, 2014,  opened an impressive 3.02 crore new accounts. Interestingly of this 1.89 crore new accounts have been opened in rural branches. State Bank of India is reported to have opened 30 lakh new accounts, the highest among all banks.

Public sector banks have been more aggressive in opening new accounts compared to the private sector. According to available data the bigger private sector banks have opened only 5.8 lakh accounts. Regional rural banks have a much better record of adding 49.28 lakh accounts. The new generation banks are perhaps more interested in catering to their ultra urban customers.

 

Don’t let them become dormant a/c

Opening of new accounts is not the ultimate goal. Banks must ensure that the new accounts do not slowly slip into becoming dormant accounts. There are already enough dormant accounts in the banking system! Banks must constantly keep in touch with the account-holders and encourage them to save, whatever little they can and include that in their savings accounts. Since all bank branches are already under Core Banking Solutions (CBS), it is operationally easy to credit the small amounts to their accounts, with very little manual intervention.


Bank staff to become stakeholders

It is reported that State Bank of India, the leader among the public sector banks, is considering a proposal to offer Employees Stock Option Scheme (ESOS) to its staff. It is a welcome change in the rigid po licy framework of the public sector bank. ESOS would give the employees of the bank the right to purchase or subscribe to the shares offered by the bank at a future date and at a pre-determined price. The objective is to motivate the staff to perform better. It also indirectly intended to attract the best talent and also to retain them.

Many companies in the IT sector, where the attrition rate is very high, have been successful in attracting and retaining their staff through ESOS. With the entry of new banks as well as the appearance of whollyowned subsidiaries of foreign banks, there could be an exodus of trained staff from the public sector banks. The severity of the likely impact of such cases can be reduced through the adoption of ESOS. It is interesting to note that the Government of India, the owner of public sector banks, is agreeable in principle to this change.

When most of the banks were in the private sector, some of the banks did encourage their staff members to become shareholders. After the nationalisation of banks, no such attempt appears to have been made by banks. By making the staff as stakeholders, it is possible to curb the uncontrolled growth in non-performing assets in banks.

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