Among the several initiatives to have emerged out of the consultative process initiated by the Finance Minister Nirmala Sitharaman to revive the economy, one relates to getting the public sector banks to do their bit. In this pan-Indian exercise, top public sector banks led by the State Bank of India, branch level officers and managers will be sensitised towards the need to understand the larger picture and see how the banks policies and practices can be adapted in line with the countryâ€™s economic growth.
The top executives of the banks have already been spoken to and they are now taking the message down to the branch level of each of their banks. It is being reported that there are eight areas of focus identified in order to implement this new approach. These include credit growth, infrastructure financing, financial inclusion, digital transactions and CSR activities.
The government wants the banks to take the lead in the efforts to bring the economy back on track. The credit off-take is seen as one of the problems holding back economic growth. The automotive sector is an example where vehicle inventory is building up either at the end of the manufacturers or at the dealersâ€™ end. This has resulted in banks not being in a position to lend them more. The new initiative will be to try and extend the loan period. There will also be fresh steps to look at extending credit to the small and medium sized companies which can lift them out of the crisis they are currently in.
This process of sensitising the bank executives is quite a broad-based one. The State Bank of India (SBI) alone had organised 380 sessions across the country where more than 15,000 branch level officials were called in to be briefed on the ways to kick in these initiatives. Apart from SBI, Canara Bank, Bank of India, Union Bank and Oriental Bank of Commerce, other public sector banks are also reportedly holding similar orientation sessions. These will involve looking at short and medium term credit offerings followed by long-term ideas that can gel with the governmentâ€™s avowed objective of achieving a $5 trillion economy within a reasonable period.
The banks already have the Mudra scheme where loans are being extended to small traders and professionals to establish /expand their businesses. The other is the PSB59 scheme where the public sector banks have a website where MSMEs can login and apply for loans and the loan will be processed within about an hour. Some banks have recently announced that the limit for this scheme is now being extended to Rs 5 crore.
Education loans, loans for healthcare and treatment, and other retail loans will also be looked at more closely and where feasible pursued aggressively.
As part of this massive exercise, the suggestions for improved customer experience received at the branches are being escalated and discussed at the regional levels for consideration and implementation.