Finance minister Nirmala Sitharaman on Wednesday said the public sector banks (PSBs) were losing connect with consumers at the branch level, which was adversely affecting the retail credit flow and impeding effective delivery of government schemes at the ground level.
She told top bankers representing state-run banks to hold periodic meetings with their field staff in order to motivate them and resolve practical challenges in maintaining consumer connect at the branch level.
The finance minister asked for finding ways for giving a personal touch to retail banking.
“How we can be friendlier at the branch level,” She asked while speaking at the launch of ‘EASE 3.0, the Public Sector Bank (PSB) Reforms Agenda 2020-21’ for smart, tech-enabled banking.
She said that every branch, particularly in the hinterland, needs at least one person who knows the local language. “AI [artificial intelligence] is fine, but customers also want a little touch of you,” she said.
Sitharaman expressed concern over bankers’ over reliance on credit scores of potential loan seekers. “Banks [PSBs] are doing core banking rather than development financing… credit rating agencies are not advisory but only indicators… so don’t blindly follow the rating agency,” she said.
She said even if a bank declines a loan, it should not be a mechanical response and the reasons should be explained to the customer.
“Letter and spirit of branch level banking is direct-connect with the customer,” she said, directing bankers to ensure it was established.
The finance minister said that public sector banks are different from private banks as they are responsible for delivering several developmental schemes of the government.
“Many branch level officials don’t have information about these schemes,” she said and asked senior management to come up with suggestions to improve banking at branch levels.
Sitharaman also unveiled the PSB EASE Reforms Annual Report 2019-20.
EASE 3.0 seeks to enhance ease of banking in all customer experiences, using technology and analytics including lending.
Preview of Banking of the Future
At the launch function organised by Indian Banks’ Association at Delhi, individual PSBs gave a preview of the array of tech-enabled services that are in the pipeline or have been piloted and will be scaled up over the coming year across PSBs.
UCO Bank unveiled plans for doorstep banking services to be launched collectively by PSBs for services such as pick-up of cheques and delivery of income-tax exemption certificate, income-tax challan, bank draft and account statement in major cities across India.
State Bank of India showcased app-based instant lending of up to Rs. 50,000 to existing small business customers and announced plans to scale it up to Rs. 1 lakh in branch-assist mode.
Union Bank of India unveiled plans to lend up to Rs. 50 crore to MSMEs through an app. Bank of Baroda showcased digital tools for doorstep account opening, including in villages and for migrant labourers with the capacity for opening about 10,000 accounts per day.