A recent communication from the Finance Ministry will make public sector banks (PSB) burn midnight oil over this weekend and the next as well.
The Finance Ministry’s note has asked banks to align themselves to the national priorities and to seek feedback on several issues such as the rise in bad loans and slow credit growth in the last five years, and to prepare a roadmap for the coming years. PSBs have been asked to involve all their approximately 1 lakh branches in the exercise.
“This is part of an initiative taken by the government to find out ways in which we can align ourselves with its national objectives,” State Bank of India’s (SBI) Managing Director (MD) Arijit Basu said in an interaction with the media. “It’s even more relevant today in the context of the relative slowdown in the economy that we have seen in the past few months.”
Some of the national priorities to which banks need to align include doubling farm income, Jal Shakti Mission, housing for all, education loans, ease of living, corporate social responsibility and financial inclusion.
Feedback sought
While feedback has been sought this weekend from the all the branches, the issues will be discussed next weekend at the State-level Bankers’ Committee. This will be followed by a national-level interaction in September, where Finance Ministry officials are also expected to be present.
“SBI collectively identified many implementable and innovative suggestions that can help improve the bank’s performance and establish a future roadmap,” a statement from the SBI said.
The Union Bank of India, which also conducted a similar exercise, said specific areas of discussion during the meeting included doubling farmers’ income, enhancing credit to small businesses, particularly through the PSB59 and MUDRA Schemes, and empowering women and Schedule Caste/Scheduled Tribe entrepreneurs.
Review and direction
The exercise, termed as “bottom-up consultative process” for PSBs, is the first comprehensive review of PSBs after Nirmala Sitharaman took charge of the Finance Ministry in May, which will also provide a direction to the banks for the next five years.
“With the economy at an inflexion point, the policy decisions and reforms taken now will define the future of banking and its contribution to economic growth. I strongly believe that this bottom-up consultative process will provide a platform for field personnel to represent and bring forward the grassroot-level challenges in their respective areas,” Union Bank of India’s MD and Chief Executive Officer G. Rajkiran Rai said.
