Finance Minister Nirmala Sitharaman on Wednesday unveiled the fourth edition of the public sector bank reforms with a focus on deepening the customer-centric digital transformation of the lenders.
With mobile and internet banking gaining currency amidst the pandemic, EASE 4.0 commits PSBs to tech-enabled, simplified and collaborative 24×7 banking.
“We reviewed the annual performance of public sector banks and also the implementation of announcements of various Covid-19 related packages,” the Finance Minister said, wrapping up her two-day visit to Mumbai.
Phenomenal growth
An official release noted that PSBs have recorded phenomenal growth in their performance over four quarters since the launch of EASE 3.0 Reforms Agenda in February 2020.
“Collectively, public sector banks have done well and have come out of PCA norms and have shown profits. They are in a position to go to the market to raise funds,” Sitharaman noted.
Debasish Panda, Secretary, Department of Financial Services, said banks are raising about ₹12,000 crore from the markets this fiscal. “Their performance helped them raise ₹69,000 crore from the market last year, including ₹10,000 crore of equity capital,” he said, adding that PSBs are able to take care of their capital requirements now.
District push
Sitharaman said banks have also been asked to push the “one district one product” agenda and will work with State governments on this. Banks are also set to start a credit outreach programme later this year where they would go to every district, she said.
Further, banks have been asked to interact with export promotion agencies and industry/commerce bodies to help address the requirements of exporters and also look at providing support to sunrise sectors as well as fintechs.
Help for fintechs
“From inputs given by officers from the tax administration, it has emerged that banks need to understand the special requirements of sunrise sectors. Fintech is one such sector that can provide technological help to banks and also benefit from the banking sector,” she noted.
Banks have also been asked to come up with specific schemes for the North-East, Sitharaman told reporters.
She highlighted that the high CASA deposits in the Eastern States are a matter of concern and said banks should give a facility in the region for greater credit expansion.
While she did not comment on questions relating to privatisation of public sector banks and general insurance companies, she stressed that government will have a bare minimum presence in strategic sectors.
“Banks, financial services, and insurance have been identified as strategic sectors,” she stressed.
Bad bank
Sitharaman said the proposed bad bank is very close to getting a licence. Panda said the Indian Banks’ Association has applied to the RBI and a licence for the bad bank is expected soon. Projects have also been identified, he said.
National Monetisation Pipeline
The Minister also stressed that under the National Monetisation Pipeline there will be no change of ownership and ownership of assets will still remain with the Government of India.
“These are brownfield assets but are underutilized. If the government has to utilise it better, it has to be through monetisation process wherein it will be put to effective use with a bit more addition to spruce it up to bring it up to utilisation,” she said in response to a query.
Taking on criticism over the government’s Rs 6 lakh crore monetisation plan, she pointed out that it was Congress-led governments that had raised Rs 8,000 crore by monetising the Mumbai-Pune expressway and had also floated the request for proposal for the New Delhi Railway Station.
Inflation
Revenue Secretary Tarun Bajaj said that it is expected that inflation will come down once the crops are harvested.
“The RBI has come out with a guidance on inflation and said that the inflation, which is a little on the up, will cool down in some time, and we also feel that once the crops come out, inflation should come down,” he said, adding that it would remain within the target of four per cent to six per cent.
He also noted that the government has taken a number of supply-side measures including a reduction in the duties on a number of products including edible oil
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