FRIDAY FRAGRANCES: GYAN SANGAM ON 02.01.2015 AND ON 03.01.2015 FOR BANKERS AT NIBM, PUNE: Some of India’s topmost Bankers will have to travel in a VOLVO bus from Mumbai to Pune, at the behest of Prime Minister, Narendra Modi. According to Media reports, the Prime Minister has invited them to a Pune Retreat to brainstorm and prepare a blueprint for an action plan to reform the Banking Sector. According to reports, those on the Bus are likely to be the State Bank of India Chairman, Arundhati Bhattacharya, Finance Minister, Arun Jaitley, RBI Governor Raghuram Rajan and Top Officials of the Finance Ministry all the way to attend the “GYAN SANGAM” event over the weekend. The PM according to reports, had asked the Bankers to make presentations at the Retreat, the venue for which he reportedly asked to be shifted from Delhi to Pune. The Banker have to stay at the National Institute of Bank Management (NIBM) Campus in Pune, the report said. The two-day retreat begins Friday, January 2 and is aimed at finding out “what has gone wrong and what should be done both by Banks as well as by the Government to improve and consolidate the position of PSBs”, the reports said. “The Finance Ministry has given six topics on which Top Executives will deliberate and debate” said a Top Bank Official with direct knowledge of the matter. Modi and Jaitley will join them on the second day when subjects such as Priority Sector Lending, Financial Inclusion, Human Resources, Consolidation, Recovery Mechanisms and Technology are expected to be discussed. In August, the Prime Minister launched the Pradhan Mantri Jan-Dhan Yojana, a Financial Inclusion Scheme to ensure that every one in India has a Bank Account. According to the Finance Ministry, about 4 crore bank accounts have been opened under the scheme as of September. Some Executives have said this effort has been taking staff away from regular banking duties as they seek to meet enrolment targets under the Scheme. Meanwhile, State-Owned Banks have been facing stress on loans made to the Priority Sector i.e. agriculture, education and the under-privileged, among others. India needs to be clearer about the purpose that state-owned Banks serve, said one former Bank Boss. “The Government should first decide whether they want PSU (PUBLIC SECTOR UNIT) Banks to make good profit or participate in National Building” said Pratip Chaudhuri, Former State Bank of India Chairman. “You cannot ask for expanding agricultural loans and then announce a debt-waiver scheme, crippling the recovery process”. Many have staffing issues. According to an estimate by Mckinsey India, 75% of the Top Management or those above the Assistant General Manager Grade are due to retire by 2020. The PSBs need equity capital infusion of Rs. 2.4 lakh crore by 2018 to meet Basel-III norms. The Top 30 bad loans account for Rs. 87,368 crore – i.e. 35.9 per cent of the Total Gross Non-Performing Assets of PSBs. Behind such colossal numbers lie the problems of Government ownership leading to corruption, meddling politicians, crony capitalism, regulatory failure and repeated “recapitalization”. If touch questions are not asked, the Gyan Sangam will tinker at the edges and preserve the status quo, while the heart of the Indian Economy – the Government-Owned Banking System will continue to beat weakly.
Posted on: Fri, 02 Jan 2015 13:02:30 +0000