Page 47 - Banking Finance April 2020

ARTICLE

correspondents that helped in demonetizing the old
currency and distribution of new currency. PSBs worked
round the clock to make the demonetization successful and
even the Prime Minister could not refrain himself from
praising the PSBs for doing the job well. PSB's work was
appreciated by the whole country during demonetization as
they stood up to the herculean task in spite of criticism in
their style of functioning.

Digital Transformation: After the entry of new age and
technology driven private sector banks, PSBs started facing
stiff competition and started losing their market share.
There was no way out for PSBs, but to transform themselves
technologically. First PSBs implemented Core Banking transfers. UPI has certainly revolutionised the digital banking
Solutions (CBS) that helped in transforming them from as PSBs are having access to the remotest part of the
branch banking to any where banking. PSBs started putting country.
ATMs all over the country and their numbers grew rapidly
as compared to private sector banks. As on 31.03.2019, PSBs are continuing to leverage digital technology to their
total ATMs belonging to Public Sector banks is 136098. While back office operations also. Digitalization of the credit
number of ATMs for private Sector Banks stood at appraisal process is helping PSBs in making their process
63340.PSBs accounts for more than 68% share of ATMs. PSBs standardized and boosting credit off-take significantly.
also focussed on Inter Net Banking (INB) platform to grow Strengthening of internal systems like Loan management
rapidly. Now PSBs are providing all sorts of transactions system and performance management system can lead to
through INB be it account enquiry, money transfer, RTGS/ greater operational efficiency.
NEFT, Issuance of demand draft, bill payments, creating
fixed deposits, TDS enquiry or e-filing. Customers using these Mergers: - Earlier there were 27 public sector banks but
INB platforms are happy with the quality of INB provided the Government has started merging the Public Sector
by PSBs. Banks to improve the operational efficiencies and
competitive position. State Bank of India merged its seven
Growth of mobile banking is said to be the biggest revolution associate Banks. Recently the Government announced the
of the 21st century. After the introduction of smart phones, merger of Oriental Bank of Commerce and United Bank with
everything from music, movies, restaurants, to tickets is on Punjab National Bank to form country's second largest Bank.
mobile phones. PSBs invested in Mobile Banking successfully. Dena Bank and Vijaya Bank were merged with Bank of
Initially PSBs were providing SMS based enquires but with Baroda and created the third largest Bank in India.
the growth of technology, all the banking activities became
handy. Except cash, today all the banking transactions can Merging Syndicate Bank with Canara Bank will create fourth
be completed through mobile phones. Not only transactions largest Bank. Union Bank will become fifth largest bank after
but Public Sector Banks are also offering online loans to merging with Andhra Bank and Corporation Bank. Seventh
select customers which can be availed through mobile apps, largest Bank will be the Indian Bank after merging with
without any documentation. Allahabad Bank. Government wants to reduce the number
of Public Sector Banks to 12. Consolidation of Public Sector
National Payments Corporation of India (NPCI) developed banks is a good move as it will help them in fighting the Non
Unified Payment Interface (UPI) to facilitate Inter Bank Performing Assets (NPAs) and reaching higher scale of
Transactions. Each of the Public Sector banks developed their operations. These 12 banks will be the new age Public Sector
own UPI. This is helpful for the masses. Those who are Banks better equipped technologically, well capitalised and
illiterate, but have an adhaar card, can also perform digital healthier.

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