Page 42 - Banking Finance April 2021

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the question arises what is the volume of Indian banks also have to operate on the predictive model basis, take a
spending on technology. look at figure 1 above, we can see it has already been
predicted the volume of the cost-saving that can be done
So being prepared for handling threats at any time is a must by using just chatbox from 2019 to 2023 is expected to grow
for all the bankers in advance. Let's not allow the butterfly to $7.30 billion. We can imagine the revenue generations
after the entire metamorphosis to escape from the brick from multiple ideas of this nature.
and mortar structure or be prepared to follow wherever it
goes by adding intelligence to digitals through AI (artificial Only those financial institutions that build a collaborative and
intelligence), investment in blockchain, and ML (machine innovative culture to drive change can achieve real returns
learning). on their technology investments in the next decade.

Finally, digital transformation is not limited to technology Being a banker of the current generation the words of bill
and data. To realize long-term success, the human side gates always haunts me "Banking is necessary not the
should also be addressed. As technology gets cheaper and banks". So I would like to conclude with a view that, in past
is readily adopted by the industry, the initial advantages may one or two decade many banks and financial institutes
decrease in the long term. This is why it's important for collapsed due to poor bottom-line which was attributed on
banks to learn how to use technology to develop new account of poor assets quality, in the coming decade the fall
customer insights and deliver contextual offerings. Another can happen majorly with attributes on account of adopting
equally important aspect to consider will be culture. More the technologies, lower budget outlay for technological up-
often than not, the success or failure of a digital gradation and poor use of technology to enhance the
transformation effort may depend on cultural issues rather profitability.
than technical ones. To make transformation happen,
leaders may need to focus on developing a new mindset for References:
how best to use technology, people and processes. Y Website : Emarketer.com : Juniper research.
Y Global PWC retail banking 2020 study.
The role of banks will definitely see a paradigm shift from Y Book : Future of India - BimalJalan.
mere being acceptor of deposit and delivery channels to
being facilitators of financial services through the Y Google.
technological arms/channel and banking no longer will be Y PWC Data June 2019.
confined to the existing "brick and mortar" model. Banks Y RBI site. T

IDBI Bank taken out of PCA, subject to conditions
RBI has recently declared that IDBI Bank has been taken out of the Prompt Corrective Action (PCA) framework, subject
to specific conditions. The bank has given the regulator a written commitment that it will comply with the norms of
minimum regulatory capital, bad assets and leverage ratio on an ongoing basis. The exit of IDBI Bank from PCA is a
crucial step towards carrying out the government's bank privatisation programme, as it is one of the lenders identified
for sale.

The RBI stated that the performance of IDBI Bank was reviewed by the Board for Financial Supervision (BFS). "It was
noted that as per published results for the quarter ending December 31, 2020, the bank is not in breach of the PCA
parameters on regulatory capital, Net NPA and Leverage ratio. The bank has provided a written commitment that it
would comply with the norms of minimum regulatory capital, Net NPA and Leverage ratio on an ongoing basis and has
apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in
continuing to meet these commitments," the central bank added.
Taking all the above into consideration, it was decided that the bank be taken out of the PCA framework, subject to
certain conditions and continuous monitoring.

42 | 2021 | APRIL | BANKING FINANCE