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