In January 2018, the Government of India launched EASE 1.0. It was developed by Boston Consultancy Group (BCG), a multinational consultant with no experience in banking at all, and it is still run by them. They just cook up some data and give projections. Their projects have failed abroad, and they have failed in India too.
BCG was a consultant for the State Bank of India and SBI implemented its ‘Career Development System’ based on the bell curve method. According to which, only 30% of the bank employees were performers and should have been incentivized. CDS has created more unhappiness in the SBI employees than the much touted satisfaction. The bank itself (thankfully) does not use it for promotion exercise, still it goes by an annual appraisal.
While releasing EASE 1.0, BCG said it will bring significant improvement in the performance of the public sector banks in resolution transparency. Nice slogans were raised- Clean Banking, Clean Credit, Leveraging Data, Ensuring Accountability, Action against defaulters, NPA Recovery, Smart Banking, Speedy, Multichannel Reach, Accessible & Affordable, Responsive, Technologically enhanced etc.
While releasing EASE 2.0 they said, “responsive banking, customer responsiveness, credit off take, PSBs as Udayami Mitra (for MSMEs), financial inclusion and digitization, governance and HR.”
While releasing EASE 3.0 last year the Finance Minister said, “Your goodwill is lost, personal connection is lost, assessment at the bottom level is lost…, forgetting branch level connect has not done us good”. This is after 6 years of NDA and 2 years of implementing EASE. She announced schemes like- Dial a loan in 59 minutes, PSB partnership with Fin Techs and ‘E-Commerce companies, Credit @ Click, Tech-based agricultural lending, and EASE banking outlets.
Now she says, EASE 4.0 is to make PSBs tech enabled, with simplified and collaborative banking to further the agenda of customer-centric digital transformation. She further stated that there will be 24X7 banking; focus will be given to the North East; bad banks will come into existence; raising funds outside the banking channel has started. Leveraging FINTECHs (Financial Technology Companies) will be done.
Has it enhanced access and service excellence? Let us look at some RBI data, and analyse whether access has been enhanced and service excellence achieved.
As on 30th July 2021, aggregate deposits of Commercial Banks were Rs.15549047 Cr whereas bank credit was only Rs. 10832938 Cr. Every quarter the deposits are growing at 10-11 % but the advances only by 5-6%. As against 104 Cr population above the age of 18 there are only 27.1 crore loan accounts.
The poor and the middle class are being pushed to microfinance institutions, private banks and FinTech’s who charge huge interests. In 2014, 85% of the bank branches, 65% of the loan accounts and 75% of the outstanding loan was with the public sector banks.
In 2021 only 68% of the bank branches, 37.5% of the loan accounts and 58% of the outstanding loans are with the public sector banks. The rest are with private banks.
There are 188 Micro Finance Institutions with 10.83 crore active accounts. Their average interest rate is 24%. Amazon Pay has 5 crore customers. Google Pay is doing banking without a licence. Every day FinTech’s are emerging and disappearing like mushrooms.
Against the target of 50 lakh borrowers under the PM SVANidhi Scheme for street vendors, only 752191 applications have been sanctioned so far, and only 210751 loans have been distributed.
The Credit Deposit Ratio in Eastern India covering Bihar, Jharkhand and Bengal as well as the entire North East has gone down drastically. Have the NPAs reduced? Yes. In the last 8 years, banks have written off Rs.10.8 lakh crores. Last 3 years alone Rs. 659638 crores have been written off.
Where is the action against the defaulters? Where is accessible and affordable banking or credit off take or customer responsiveness?
The RBI or any other agency should conduct a customer satisfaction survey and employee satisfaction survey to find out the truth.
Never in the 75 years of history, banks were not only mismanaged so much but also used to help a few corporates.
Never in the 75 years of our history, banks were misused so badly, starting with demonetisation to MUDRA Loan Melas.
Never in the 75 years of history, bank failures were claimed as success.
Never in the 75 years of history, banks were alienated so much from the masses.
It is time to reclaim public banking to support the larger public.
Let us Reclaim the Republic @ 75
Let us Reclaim Mass Banking @ 75
Thomas Franco is the former General Secretary of All India Bank Officers’ Confederation.
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