Money & Banking

‘Efficiency, smart banking key to consolidation'

Our Bureau Manipal | Updated on February 15, 2011

Smart banking plays a major role in consolidation in banking industry than the size of the banks, according to Mr Devananda Upadhyaya, General Manager of Syndicate Bank.

Delivering the keynote address at the inauguration of a one-day conference on ‘Contemporary issues in banking', organised by the Commerce Department of the Manipal University here on Tuesday, he said consolidation is the buzzword in the banking sector now.

Neither the big nor the small banks play a key role in consolidation. It is the smart banking that plays the major role in this matter.


Efficiency is essential for smart banking, he said. “Size is not the issue in consolidation. But the efficiency is,” he said.

On the use of technology in banking sector, Mr Upadhyaya said IT is a back-end facilitator for banking. Banking sector needs technology to reduce cost and to add convenience to customers. Though technology is gaining importance in banking sector, there is also need to re-engineer the banking process. Business process re-engineering is a must for banks in the country, he said.


Speaking on financial inclusion in banking sector, he said Syndicate Bank understood the importance of this concept several decades ago and introduced ‘pigmy' – a micro deposit scheme.

Inaugurating the conference, Mr Ananthakrishna, Chairman of Karnataka Bank Ltd, said that 60 crore population in the country is eligible for banking facilities. But a majority of them do not have bank accounts. India has around 65,000 bank branches with Rs 48 lakh crore of deposits and Rs 37 lakh crore of advances.

However, it is yet to reach a majority of people who don't have banking facilities.

In such a situation, financial inclusion is important to provide banking facilities to the eligible people in the country.

Loan waiver

Expressing displeasure over loan waivers, he said loan waiver introduces financial indiscipline among borrowers.

Repayment of loan is a contractual obligation. Such a contractual obligation gets last priority with the introduction of measures such a loan waivers, he said.

Rather than introducing loan waivers, farmers should be encouraged to take up agriculture insurance schemes, he added.

Dr Vinod Bhat, Pro Vice-Chancellor of Manipal University, presided over the meeting.

Mr Sandeep Shenoy, Head of the Commerce Department of Manipal University, and Mr Guru Prasad Rao, conference coordinator, spoke on the occasion.

Published on February 15, 2011

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