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