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The finance ministry has directed state-run banks to undertake a third-party survey “for a reality check” on benefits accrued to customers due to various reforms measures undertaken by them over the past four years, sources told FE. Public sector banks (PSBs) have also been asked to develop business models, in keeping with the requirements of the GenNext customers.
Last month, the ministry also asked PSBs to put in place a “collaborative mechanism” for preventing frauds, bolstering cyber security mechanisms and upgrading technology infrastructure, one of the sources added. Already, large PSBs have been directed to submit reports on the impact of the amalgamations that they went through in recent years.
In recent months, the govenrment has renewed focus on the “good old ‘customer-first’” approach, as it feels state-run banks’ understanding of the changing needs of customers and appropriate responses will help them withstand fierce competition from their private peers, who have been steadily wooing customers away from the PSBs due to what many perceive as their “better customer services”.
The share of state-run banks in total loans and advances dropped from almost 71% in FY16 to about 59% in FY21.
“The finance minister (Nirmala Sitharaman), in her meetings with public sector bankers, has made it amply clear that the focus is now on improving customer services and also adopting strategy to meet the aspirations of young entrepreneurs, etc. PSBs were told last month to firm up strategy on these things,” one of the sources said.
The Indian Banks’ Association is likely to soon undertake an independent survey, based upon initiatives focussed on customers so far under the so-called EASE (enhanced access and service excellence) reforms initiative, by roping in an established market research agency or institute like IIMs or IITs, said another source.
Similarly, to understand the needs and aspirations of young customers, especially budding entrepreneurs, state-run banks are likely to conduct open-house interactions with such clientele across various centres and share the feedback with the department of financial services.
Last month, the finance ministry had asked each PSB to firm up a three-year road map based on its business priorities under a revamped reform initiative launched by the finance minister.
EASENext, the latest and revamped version of the EASE reform programme, will have two components: EASE 5.0, which is a common reforms agenda for all PSBs, and a bank-specific medium-term action plan.
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