Page 45 - Banking Finance April 2020

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introduced in 1978-79 and aimed at alleviating rural of the Banks have migrated to core banking platform within
poverty by providing income generating assets to the a short span of time. They started opening ATMs, delivering
poorest of poor. PoS machines, started offering Net banking and introduced
advanced digital products.
Y Pradhan Mantri Gram AwasYojana: This scheme was
started in 1985 with the idea of housing for all. Under
the scheme loans were given to rural people at Public Sector Banks and subprime crisis: After the
subsidized rates. collapse of Lehman brothers due to subprime crisis, it was
forecasted that it will hamper Indian economy and Indian
Y Swarnajayanti Gram Swarozgar Yojana (SGSY), now
National Rural Livelihood Mission (NRLM): It is poverty banks. But, Indian banks especially Public Sector Banks
successfully weathered the crisis. During 2007-08 and 2008-
alleviation programme implemented by Ministry of
09 PSBs in India were having Return on Asset (ROA) at 1%,
Rural Development. This focuses on promoting self
employment and organization of rural poor. which is considered good as ROA had been negative all over
the world. When capital was eroding all over the world and
Banks required fresh capital infusion, Capital adequacy
Apart from these schemes, Prime Ministers Rozgar
improved in FY'2008-09 in India. It was also forecasted that
Yojana(PMRY), Pradhan mantri Gram Sadak Yojana
Non Performing Assets (NPA) will increase in India after the
(PMGSY), Sampoorn Gramin Rozgar Yojana (SGRY) ,National
crisis, which actually did not happen. Public sector Banks
Rural Employment generation scheme(NREGS) etc. were
with their time-tested approach for lending saved the
rolled out through PSBs. Public Sector Banks are continuously
country from crisis.
supporting the Government in achieving their social
objectives.
Finacial Inclusion: Thrust of financial inclusion came when
Reserve Bank of India in its annual policy statement of 2005
Economic Reforms: Economic reforms of 1991 gave way
asked banks to reach towards the masses and provide the
to new age private sector banks like ICICI Bank, HDFC Bank,
banking facilities at a place of their convenience. Biggest
Axis Bank, Kotak Mahindra Bank etc. and foreign banks like
CITI Bank, Standard Chartered Bank, HSBC Bank etc. These change came in, when from the ramparts of Redfort , on
15th August 2014, Prime Minister, Mr. Narendra Modi,
banks came with:-
announced one of the biggest financial inclusion drives (Jan
Y Sounder technology like ATM, PoS, Internet Banking,
Dhan Yojana) in the world. The main purpose of the scheme
Mobile Banking etc.
was to transfer subsidies directly into the accounts. Public
Y Personalised banking and financial services to high net Sector Banks were instrumental in opening Jan Dhan
worth individuals. Accounts. They organized camps from village to village and
Y Dedicated Relationship Manager assigned to the worked relentlessly to achieve the desired results. It was a
customer. Herculean Task as every bank was given only 6 months time
to achieve a specified target. Public Sector Banks lived upto
Y Door step delivery of loans.
the Governments expectations.
Y Customisation of products according to the needs of the
customer. As per data available from Department of Financial services,
Ministry of Finance, as on 18.09.2019, total number of Jan
On one hand PSBs were directed to achieve Priority sector Dhan Accounts opened are 37.05 crores out of which nearly
lending targets, social scheme targets and on the other 29.46 crores were opened by the PSBs This is nearly 79.50
hand they had to focus on competing with these Private and percent of the total jan dhan accounts opened. Regional
foreign players who were better equipped, technologically Rural banks opened only 17 percent and private banks
and professionally. Public Sector Banks started losing their opened only 3.50 percent of total Jandhan accounts. This is
market share. Considering this the Public sector banks despite the fact that Private Sector Banks constitute nearly
started evolving rapidly by improving their technology. Most 25 percent of the total banking business.

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