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

It was a rare occasion, where the Prime Minister attended the bankers’ meet along with the Finance Minister, the Governor of Reserve Bank of India and the top officials of the Finance Ministry.

The deliberations of the two-day meet were focused. The outcome has been positive in directing the banking sector to improve its operational mechanism to respond to the changing aspirations of the masses, without sacrificing efficiency.

 

Reaching out to the unreached...

Providing easy accessibility to banking services for the poor continued to be the major thrust area. Banks have travelled miles since the launching of the National Mission for Financial Inclusion in August last year, under the Pradhan Mantri Jan-Dhan Yojana. It appears that banks have collectively opened 10.63 crore new basic savings bank accounts.  Nearly 78 percent of these accounts are having zero balance of deposits, while 2.30 crore accounts are having a total deposit of Rs.8369 crore. According to Census 2011, the percentage of households availing banking services was 58.7 and it has now risen to 98 percent. With this remarkable achievement, banks must now ensure that the accounts with zero balance do not slip into dormant accounts.


Curtailing non-performing assets (NPA)

The rise in NPAs is a cause for concern. According to the Reserve Bank of India, the gross NPA has increased to 4.5 per cent and net NPA has gone up to 2.5 per cent of the total advances as on September 2014. Banks have been directed to strengthen their risk management apparatus to receive early warning signals. The government is planning to make laws relating to recovery of dues more stringent by amending the SARFAESI Act. Laws pertaining to debt recovery tribunals (DRT) are also expected to be amended to effectively deal with bad loans and willful defaulters.

 

Maintaining autonomy of banks

Political interference in the public sector banks’ operations has been an issue which could not be eliminated so far. This is reflected in the nomination of directors in the banks’ boards also. The Prime Minister has assured bankers that there would not be any interference by the PMO. It is highly desirable to include in the board, experts in financial management and even retired bank executives of proven track record, instead of persons owing allegiance to political parties.

It was decided to leave the decision of bank mergers to the banks themselves: no bank merger would be initiated by the government. Merger is not a desirable strategy at this stage as it is bound to dilute the amalgamated banks’ interest in intensifying their recovery drives.  Also the mere merger of banks is not going to make the public sector banks competitive, so long as they continue to carry less remunerative business components.

 

Improving the human resources

Banking sector employs over a million. But for their participation, it could not have reached out to over 150 crore households across India. So far no thought has been devoted to making them the shareholders of banks. As the Government of India is planning to reduce its shareholding in the public sector banks, bank staff may be encouraged to become shareholders. When the wage revision is being negotiated, the staff may be advised to invest at least 10 per cent of the enhanced wages in their own banks’ shares. The officers and workmen are represented by their elected leaders as directors in the banks. It is time the banks’ unions consider the feasibility of investing in the banks’ shares. n

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