Centre will infuse Rs 88,139 crore — of which Rs 8,139 crore is through budgetary allocation — into the banks by issuing recapitalisation bonds this financial year
AMN /NEW DELHI
Government today spelt out a new and comprehensive roadmap for public sector banks to improve their functioning. The new set of guidelines, the finance ministry said, will stress on rigorous due diligence, post-sanction follow-up on loans and separate asset management verticals to ensure public savings are untouched.
As part of the plan, the Centre will infuse Rs 88,139 crore — of which Rs 8,139 crore is through budgetary allocation — into the banks by issuing recapitalisation bonds this financial year. IDBI Bank will corner most of this money at Rs 10,610 crore.
Government of India announces details of Bank recap and Comprehensive Reform Plan
This plan addresses regulatory capital requirement of all PSBs and provides a significant amount towards growth capital for increasing lending to the economy.
The recap would be accompanied by a strong reforms package across six themes incorporating 30 action points. The reforms agenda is based on the recommendations made at the PSB Manthan held in November, 2017 involving senior management of PSBs and representatives from Government. The reform agenda is aimed at EASE – Enhanced Access and Service Excellence, focusing on six themes of customer responsiveness, responsible banking, credit off take, PSBs as Udyami Mitra, deepening financial inclusion & digitalisation and developing personnel for brand PSB. The overarching framework for the reforms agenda is “Responsive and Responsible PSBs”.
Capital infusion by the Government is contingent on performance of PSBs on the reform. Whole Time Directors of PSBs would be assigned theme wise reforms for implementation. Their performance in this regard would be evaluated by the bank Board.
A survey by an independent agency in respect of EASE would be conducted to measure public perception about improvements in access and service quality. Results of the survey shall be made public each year.
Taken together, the recap & reform agenda is sharply focused on strengthening PSBs, increasing lending to MSMEs and making it easier for MSMEs and retail customers to transact as well as significantly increasing access to banking services. It includes a commitment to banking services within 5 kms of every village, refund within 10 days of any unauthorised debit in electronic transactions, a mobile App for locating banking outlets and a mobile ATM in every underserved district.