The two day bankers retreat -- Gyan Sangam -- ended in Pune on Saturday, with bankers collectively resolving to improve on five points and even demanded some commitment from the government to improve the state of banking in the country.

In a presentation made to the Prime Minister, on behalf of all bankers, State Bank of India Chairperson Arundhati Bhattacharya reportedly said, "We as a group (all public sector banks) have decided to adopt five major resolutions."

The five points include -- a decision to re-orient the portfolios of small public sector banks to focus on specific and differentiated niches, build people capacities, use of more technology (especially in the top 30 processes), strengthen risk management practises and strengthen the partner channels such as business correspondents.

Financial Services Secretary, Hasmukh Adhia, said, "This is something banks have said they will work upon...we have specified no timelines for any of them."

At the same time, bankers have also asked the government for some commitment which Adhia said will be looked into "positively."

The bankers have requested the government to move from a state-owned structure to a state-linked structure, as recommended by the P.J.Nayak committee report. This would entail, among other things, setting up of a banking bureau comprising of professionals and eminent bankers to appoint and empower individual bank boards.

Other commitments requested by the banks, of the government include: fully empower banks on human resource related decisions, creating the right environment for minimal interference, strengthening the legal framework for recovery of loans, strengthening and simplify processes for credit insurance, eliminate debt waivers and do away with interest rate caps, and finally creating the enabling infrastructure for digital banking.

Adhia later quoted the Prime Minister as saying, "The PM assured all the bankers that there will be no interference by the government in the functioning of the banks...not even from the Prime Minister's Office." Media was not allowed to cover the PM's address.

Adhia also added that the PM suggested that bankers must think about sharing of resources to bring down cost.

For instance, the PM reportedly suggested that banks could get together to advertise their deposit and lending rates, instead of running different advertisements.

Modi also reportedly told bankers to extend more education loans to people.

BANK CONSOLIDATION

Asked if any specific discussions happened around consolidation of banks given the government's thrust to have at least a few global-sized banks, Adhia said, "Consolidation depends on the decision of the respective bank boards...the government is there to help."

He said that the idea of this Gyan Sangam was to sensitise the banks on the need to take action.

"We don't want to get into setting a mandate on what banks should do," Adhia added.

Gyan Sangam could become an annual event, Adhia indicated. Infact the PM has also asked the bankers to conduct such internal brain storming sessions by pooling together 40-50 bankers from their respective banks."

Related Topics
comment COMMENT NOW