The push for digitisation in the wake of demonetisation and the proposal for public sector bank (PSB) consolidation are likely to top the agenda for Gyan Sangam which is the retreat for PSBs, government-owned Financial Institutions (FI) and insurance companies, slated for March.
The sessions on digitisation will include presentations on increasing the use of Artificial Intelligence (AI) systems and big data analytics in the banking & financial services industry in India.
Credit growth slowdown
The major slowdown in credit growth – to a more than six-decade low of 5.1% for the fortnight ended December 23 – and ways to revitalise it, as well as measures to effectively tackle bad loans will also be among the main discussion topics during the Gyan Sangam , official sources told The Hindu . The third edition of the retreat – which will be attended by senior finance ministry officials as well as heads of PSBs, state-run FIs and insurance firms – is likely to be held in Hyderabad or Bengaluru, they added.
Referring to the manpower shortage, especially in middle management in PSBs, the sources said the retreat would have discussions on automating many of these functions to ensure productivity improvement.
Strategies for strengthening the ‘banking correspondent’-network and increasing the usage of micro ATMs and Point of Sale machines will also be discussed.
The high-profile meeting will also deliberate upon the need for the autonomous Banks Board Bureau (BBB) to expedite banking reforms including PSB consolidation.
The BBB was set up to help select heads of public sector banks and financial institutions as well as assist banks with strategies and capital-raising plans.
On bad loans, the discussions are likely to be centred on the pros and cons of the proposed National Asset Management Company (or a ‘bad bank’) - a special category asset reconstruction company with stakeholders including the government and the private sector for takeover and turnaround of bad loans, stressed assets and restructured assets.
On the issue of low credit growth, Soumya Kanti Ghosh, Chief Economic Advisor, State Bank of India, said the 5.1% growth for the fortnight ended December 23, 2016, was the lowest since 1.7% in 1954-55, adding that the recovery will be gradual and will be more pronounced only in the second half of 2017-18 provided the forthcoming Budget has measures to boost demand.