PSBs to begin second brainstorming exercise from today to bolster ops

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Published: August 22, 2019 1:44:30 AM

The move is part of the government’s drive to promote a “bottom-up” approach to herald banking reforms. While overall credit growth is still at about 12%, the flow of loans to small/medium businesses has remained weak and export credit growth has contracted.

PSB, exercise, bank, operations,  India, MSME, agriculture credit, export credit, industry news, banking newsThe inputs received in the first round will now be shared at the state levels of various banks, as per the direction of the finance ministry’s department of financial services.

State-run banks will embark on the next round of a brainstorming exercise for two days from Thursday to further bolster processes and ease the flow of credit while helping the nation become a $5-trillion economy in the next five years. While the first round of this exercise involved seeking inputs from branch-level officers, the second leg of this campaign from Thursday will involve inter-bank sharing of ideas. The inputs received in the first round will now be shared at the state levels of various banks, as per the direction of the finance ministry’s department of financial services.

The move is part of the government’s drive to promote a “bottom-up” approach to herald banking reforms. While overall credit growth is still at about 12%, the flow of loans to small/medium businesses has remained weak and export credit growth has contracted. To reverse this sluggishness, public-sector banks (PSBs) have been nudged by the government to align banking with ‘national priorities’ such as enhancing credit flow to small and medium businesses, empowering SC/ST entrepreneurs, improving farmers’ income, facilitating digital transactions and the focusing on the green economy. PSU banks are hoping that a pick-up in demand would help revive credit demand too.

PSBs will hold meetings at 30 places, mostly in the capitals of various states. Middle-level officials will participate in it. They will deliberate on the issues and concerns being faced by various banks along with performance review, sources said, adding that they will also come up with ideas and suggestions for preparing a road map for the future growth of banking sector.

Nine thematic papers by domain experts on various challenges will be discussed during the meet so that reforms measures can be suggested on these critical issues. These themes include increasing digital payments, credit for India’s MSMEs, agriculture credit, export credit in India and need to establish financial grid.

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