Shri Pankaj Jain, Additional Secretary, Department of Financial Services, Shri Amit Agrawal, Additional Secretary, Department of Financial Services & Chairman IBA, Shri Rajkiran Rai G., were also present at the event.
Public Sector Banks have reported healthy profits and have accelerated on technology-driven reforms. These banks have reported a profit of Rs. 31,817 crore in FY21 as compared to a loss of Rs. 26,016 crore in FY20. This is the first year when PSBs have reported profit after five years of losses. Total gross non-performing assets stood at Rs. 6.16 lakh crore as of March 2021 - a reduction of Rs. 62,000 crore from March 2020 levels.
· Credit@click was a flagship initiative under EASE 3.0. Nearly 4.4 lakh customers have been benefitted through such instantaneous and simplified credit access.
· PSBs have setup mechanism for customers where they can register loan requests 24X7 through digital channels such as Mobile and Internet banking, SMS, missed call and call centre. In FY21, PSBs have collectively disbursed Rs. 40,819 crore of fresh personal, home and vehicle loans through leads sourced from such digital channels.
· The top 7 PSBs have built analytics capabilities through the setup of dedicated analytics teams and IT infrastructure to proactively offer loans to its existing customers. Such loan offers were generated using the existing customer transactions data within the banks. In FY21, Rs. 49,777 crore of fresh retail loan disbursements were made by the top 7 PSBs based on these credit offers.
· PSBs have also extensively used external partnerships and dedicated marketing salesforce network for the sourcing of retail segment and MSME segment loans. Sourcing from such channels has been 9.1 lakh loans in FY21.
Mobile/Internet banking and customer service
· Nearly 72% of financial transactions happening at PSBs is now happening through digital channels. PSBs are now offering services across call centres, Internet banking, and Mobile banking in 14 regional languages such as Telugu, Marathi, Kannada, Tamil, Malayalam, Gujarati, Bengali, Odia, Kashmiri, Konkani, Hindi, Punjabi, Assamese for the ease of customers.
PSBs have recorded a phenomenal growth in their performance over four quarters since the launch of EASE 3.0 Reforms Agenda. The overall score of PSBs increased by 35% between March-2020 and March-2021, with the average EASE index score improving from 44.2 to 59.7 out of 100. Significant progress is seen across six themes of the Reforms Agenda, with the highest improvement seen in the themes of ‘Smart Lending’ and ‘Institutionalising Prudent Banking’.
What is EASE 4.0? EASE 4.0 – Tech-enabled, simplified, and collaborative banking
The next edition of EASE reforms i.e. EASE 4.0 aims to further the agenda of customer-centric digital transformation and deeply embed digital and data into PSBs' ways of working.
EASE 4.0 is a common reform agenda for Public Sector Banks (PSBs) aimed at institutionalizing clean and smart banking.
Key Features of EASE 4.0
Data enabled agricultural credit : Dial a loan for Agri loans
- Smart Lending: Credit@click ; Dial-a-loan
EASE has become the cornerstone of reforms in PSBs. The institution of the comprehensive index has catalysed accelerated implementation of several initiatives and has injected greater customer centricity in PSBs’ business model and processes. PSBs have fundamentally re-oriented their ways of working to align with EASE methodology and have made concerted efforts to deep-root reforms and maximise the value derived from them.
The next edition of EASE reforms i.e., EASE 4.0 aims to further the agenda of customer-centric digital transformation and deeply embed digital and data into PSBs’ ways of working. Two new themes have been introduced to deliver on these objectives.
New Age 24x7 banking with resilient technology has been introduced to ensure uninterrupted availability of banking services by ensuring 24X7 availability of select banking channels, improving the reliability of technology platforms, and aligning internal processes in the PSBs to deliver such services.
Collaborative banking for synergistic outcomes aims to maximise synergies through collaboration between PSBs and with broader financial services ecosystem such as NBFCs for the coordinated handling of co-originated loans.
In addition to the above new themes, several other new reforms will be added to existing themes such as increased use of digital and data for Agri financing through partnerships with third parties for alternate data exchange, driving impetus on digital payments in semi-urban and rural areas, at-scale adoption of doorstep banking services for PSB customers, etc.
With the amalgamation of 13 PSBs into 5 PSBs now successfully complete, EASE 4.0 sets the agenda and roadmap to transform all PSBs into digital-attacker banks working hand-in-hand with key constituents of the financial services ecosystem to offer industry-best customer experience.
RECAP OF EASE REFORMS: EASE1.0; EASE 2.0 AND EASE 3.0 – The Journey of PSB Reforms EASE Agenda
What is EASE ?
PSB reforms agenda – EASE (Enhanced Access and Service Excellence) was launched based on the recommendations made by PSB Whole Time Directors (WTDs) and senior executives in PSB Manthan in November 2017. It encapsulates a synergistic approach to ensure prudent and clean lending, better customer service, simplified and enhanced credit, and robust governance and HR practices. The Reforms Agenda is pursued through a unique Reforms Index that enabled objective assessment of progress on all key areas in PSBs — viz., governance, prudential lending, risk management, technology- and data-driven banking, and outcome-centric HR — as well as enhanced transparency and accountability in the wider financial ecosystem.
EASE Reforms Agenda:
1. It was launched in January 2018 jointly by the government and PSBs.
2. It was commissioned through Indian Banks’ Association and authored by Boston Consulting Group.
3. EASE Agenda is aimed at institutionalizing CLEAN and SMART banking.
4. The Index measures performance of each PSB on 120+ objective metrics
The EASE 1.0 report showed significant improvement in PSB
performance in resolution of Non-Performing Assets (NPAs) transparently.
The first edition of the EASE program pertaining to FY19 aimed at laying the foundation for themes such as Customer Responsiveness by enabling banking from the comfort of home and mobile and grievance redressal, responsible banking through the setup of dedicated Stressed Assets Management Vertical (SAMV) for rigorous monitoring of large-value stressed loans, improved governance and financial stability through institutionalising risk appetite frameworks and riskbased pricing, near-home banking by providing branch equivalent services through Bank Mitras, and enhanced micro-insurance coverage ensuring financial inclusion, and developing personnel for Brand PSBs through initiatives such as the implementation of Performance Management System (PMS).
( Please click on the following link for detailed read on: Enhanced Access & Service Excellence (EASE) Reforms for Public Sector Banks
EASE 2.0 builds on the foundation of EASE 1.0 and introduces new reform Action Points across six themes to make reforms journey irreversible, strengthen processes and systems, and drive outcomes.
The six themes of EASE are:
1. Responsible Banking.
2. Customer Responsiveness.
3. Credit Off-take.
4. PSBs as UdyamiMitra (SIDBI portal for credit management of MSMEs).
5. Financial Inclusion & Digitalisation.
6. Governance and HR.
EASE Reforms Index:
· The Index measures performance of each PSB on 120+ objective metrics.
· The Index follows a fully transparent scoring methodology, which enables banks to identify their strengths as well as areas for improvement.
· The goal is to continue driving change by encouraging healthy competition among PSBs.
The second edition of the EASE program for CLEAN and SMART banking was launched for FY20 to further build on the foundation of EASE 1.0. It has been instrumental in further systematically addressing root causes of weaknesses in PSBs effected through hard-wiring of sound IT systems and processes. It has set up comprehensive Loan Management Systems (LMS) for faster processing and tracking, introduced Early Warning Signals (EWS) systems and specialised monitoring for timebound action in respect of stress, put in place focussed recovery arrangements, and esablished outcome-centric HR systems. The reforms have equipped Boards and leadership for effective governance. Further, it has enabled banking from home and mobile through an expanded bouquet of services, including enhanced regional languages availability.
( Please click on the following link for detailed read on: EASE 2.0 Banking Reforms Index - Performance of Public Sector Banks from March 2018-2020. http://rakeshkhareblogs.blogspot.com/2020/09/ease-20-banking-reforms-index.html#more)
EASE 3.0 — Smart, Tech-enabled Banking for Aspiring India
Key Reform Action Points in EASE 3.0 include:
- Dial-a-loan: Digitally-enabled doorstep facilitation for initiation of retail and MSME loans. Customers will have the facility to register loan requests through digitally-enabled channels
- Customer-need driven credit offers by larger PSBs to existing customers through analytics, e.g., for EMI on expenses like holidays/school-fees/jewellery/consumer durables, home loan takeovers, loan-against-property post home loan closure, working capital enhancement based on sales jump
- Partnerships with FinTechs and E-commerce companies for customer-need driven credit offers
- Credit@click: End-to-end digitalised, time-bound retail and MSME lending by larger PSBs, leveraging Account Aggregators, FinTechs and PSBloansin59minutes.com
- Cash-flow-based MSME credit by larger PSBs, using FinTech, Account Aggregator and other third-party data and transactions-based underwriting models
- Tech-enabled agriculture lending
- Palm banking: End-to-end digitalised delivery of a full bouquet of financial services in regional languages and with industry-best service quality
EASE Banking Outlets: On-the-spot banking at frequently visited places such as train stations, bus stands, malls, hospitals, etc. through paperless and digitally-enabled banking outlets and kiosks.
The third edition of the EASE reforms (EASE 3.0) was launched in FY21 to help catalyse accelerated adoption of customer-centric digital transformation initiatives across PSBs.
( Please click on the following link for detailed read on: Finance Minister unveils EASE Roadmap for Banking of the Future EASE 3.0 Reforms : https://yourcareerheights.com/?p=4116)