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FM: Govt banks out of touch with consumers ‘Give Loans Or Don’t, But Be Responsive’

February 27, 2020 05:09 AM


FM: Govt banks out of touch with consumers
‘Give Loans Or Don’t, But Be Responsive’

New Delhi:

Finance minister Nirmala Sitharaman on Wednesday rapped state-run banks for lacking consumer connect and said often executives at the branch level could not communicate in the local language or provide details of government schemes.

The minister’s outbursts at an event to unveil the next phase of public sector bank reform plan, EASE 3.0, were triggered by repeated customer complaints that she received from across the country. It was a rare tongue-lashing to PSB chiefs and top executives, reminding them that they had lost ground-level touch, something that they were always known for.

“I am going to say things which won’t be music to your ears. But I am going to say it because we need to introspect. Today, when people come to meet me, there are often worries on how, at the branch level, we can be a little more friendlier,” the finance minister said, while urging top bankers to revamp their operations and motivate staff at the branches.


FM to PSBs: Follow norms, but attend to loan seekers

The statements came amid a credit slowdown, which bankers have attributed to overreach by agencies on alleged fraud. Sitharman once again sought to allay fears over this issue, saying the government will protect genuine business decisions and it had already put in place several measures to shield honest bankers. But she made it clear that banks need to move ahead decisively on loan proposals.

“It has to be normal practice that those who want credit get it. Those who approach you in the branch and tell you their requirement, follow the prudential norms, but attend to them. Tell them why you want to give them (a loan), tell them why you don’t want to give. But tell them. Be responsive... I will give you easy access and I also request you to give the customer easy access and get back to being that proud public sector bank official,” the FM said.

She listed out several areas which required immediate attention to improve performance at the branch level. For instance, she said, there was over-reliance on data from credit rating agencies and credit information bureaus and branches no longer knew their customers well. “We have got credit rating agencies and agencies that rate different banking functions and therefore talk about the customer and his (credit) worthiness. But they are not advisory, they are only an indicator of what a customer is. Was there ever a directive from either the RBI or the Indian Banks’ Association to say that you will blindly follow the rating agencies numbers? No.”

Sitharaman suggested that there should be a “judicious mix” of personal connect with the customer and data. By ignoring that connect, she said: “Your goodwill is lost, your personal connect is lost, your assessment at the bottom level is lost… forgetting branch-level connect with customers has not done us good.”

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