Banking transformation

1. Next phase of transformation in banks
1. Shridhar Agarwal
2. Nirbhay Bade
5. Vinayak Bhutada
9. Aashay Chitre
11. Snehal Dalvi
13. Swapnil Deshmukh

2. Financial Inclusion
 Swabhimaan program
 Jan-Dhan yojana
 Direct benefit transfer-JAM trinity, PAHAL
 Payment banks
 100% FDI in white label ATM

3. Dr. Nachiket Mor committee
 To re-engineer Indian banking architecture
 Principle licenses to 11 payment banks
 Principle licenses to 10 Small finance banks
 Liberalized branch licensing policy
 ‘Indradhanush’ framework

4. Performance of banks
• Indicates better quality performance of PvSB compared to PSB
0
10
20
30
40
50
60
70
80
90
CASA CD Ratio Non SLR
investment
Investment to
deposit ratio
PSB vs PvSB
PSB PvSB

5. Ratios impacting market valuation
0
2
4
6
8
10
12
14
16
18
ROA ROE Operating profit
to Assets ratio
PSB vs PvSB
PSB PvSB

6. Reasons for differentiated performance
 Systematic control on level of performance of human capital
 PSB- socio economic development
 Stress on asset quality & consequent pressure on capital adequacy are concern for PSB
 For PSB reforms needed in performance management system:
 Style of people governance
 Decision support system
 Top down management hierarchy
 Better leadership orientation

7. Challenges
 Entry of new financial intermediaries
 Diminishing overall profitability
 Asset quality (Kingfisher)
 High attrition rate
 Inadequate talent management system
 Implementation of Basel –III standard (Capital Adequacy of bank)
 Prevention of fraud (Bhushan Steel case)

8. Indradhanush
 Seven strategic initiatives:
1. Appointments of MD & CEOs in PSBs
2. Bank Board Bureau
3. Capitalization of PSBs
4. De-stressing PSBs
5. Empowerment
6. Frame of accountability
7. Governance reforms

9. Emerging Scope for business
 Digital India
 Swatch Bharat
 Make in India
 Housing for all
 Gold monetization scheme
 Direct benefit transfer
 Jan Suraksha yojana

10. Thank You.