Indian Banks’ Association will solely oversee EASE 4.0 banking reforms, BFSI News, ET BFSI
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Ease 4.0 was announced just a few days back finance minister Nirmala Sitharaman.
This year PSBs will focus on introducing and promoting new analytics-based offers to existing retail customers like pre-approved car loans, EMI offers on e-commerce purchases and also for existing MSME customers.
EASE focuses on six themes of customer responsiveness, responsible banking, credit offtake, PSBs as Udyami Mitra, deepening financial inclusion and digitalisation, and developing personnel for brand PSB.
It is part of the reforms agenda devised on the recommendations made at the PSB Manthan held in November, 2017 involving senior management of PSBs and representatives from government.
The overarching framework for the reforms agenda is “Responsive and Responsible PSBs”.
As per the proposed reform agenda, banks will leverage partnerships with third parties, including agritech firms and strive to automate processing and sanction of agricultural loans based on field visit, borrower interaction, and risk assessment in states with digitised land records.
Under the co-lending model with non-banking finance companies, banks will take 80 per cent exposure, while NBFCs will provide customer service and grievance redressal.
Indradhanush failure
The government’s earlier recapitalization programme Indradhanush had failed to meet desired objectives.
According to an earlier report by India Ratings, while the scheme envisaged to recapitalise banks based on their performance and its ability to support credit expansion, in reality the capital infused was largely consumed to tide over losses resulting from provisions required for non-performing assets (NPAs). The Indradhanush plan was announced in August 2015 to help turnaround public sector banks.
The credit rating agency had said that unless structural changes are implemented, the requirement for capital infusion is likely to continue even though the quantum required may be lower. This is because large part of the current stress in the balance sheets of PSBs has already been recognised and provided for.
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