Page 27 - Banking Finance May 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
Pradhan Mantri Gram Awas Yojana: This scheme was advanced digital products.
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:
subsidized rates. After the collapse of Lehman brothers due to subprime crisis,
Swarnajayanti Gram Swarozgar Yojana (SGSY), now it was forecasted that it will hamper Indian economy and
National Rural Livelihood Mission (NRLM): It is Indian banks. But, Indian banks especially Public Sector
poverty alleviation programme implemented by Banks successfully weathered the crisis. During 2007-08 and
Ministry of Rural Development. This focuses on 2008-09 PSBs in India were having Return on Asset (ROA)
promoting self employment and organization of rural at 1%, which is considered good as ROA had been negative
poor. all over the world. When capital was eroding all over the
world and Banks required fresh capital infusion, Capital
Apart from these schemes, Prime Ministers Rozgar Yojana adequacy improved in FY'2008-09 in India. It was also
(PMRY), Pradhan mantri Gram Sadak Yojana (PMGSY), forecasted that Non Performing Assets (NPA) will increase
Sampoorn Gramin Rozgar Yojana (SGRY) ,National Rural in India after the crisis, which actually did not happen. Public
Employment generation scheme (NREGS) etc. were rolled sector Banks with their time-tested approach for lending
out through PSBs. Public Sector Banks are continuously saved the country from crisis.
supporting the Government in achieving their social
objectives. Financial Inclusion:
Thrust of financial inclusion came when Reserve Bank of
Economic Reforms: India in its annual policy statement of 2005 asked banks to
Economic reforms of 1991 gave way to new age private reach towards the masses and provide the banking facilities
sector banks like ICICI Bank, HDFC Bank, Axis Bank, Kotak at a place of their convenience. Biggest change came in,
Mahindra Bank etc. and foreign banks like CITI Bank, when from the ramparts of Redfort , on 15th August 2014,
Standard Chartered Bank, HSBC Bank etc. These banks came Prime Minister, Mr. Narendra Modi, announced one of the
with:- biggest financial inclusion drives (Jan Dhan Yojana) in the
Sounder technology like ATM, PoS, Internet Banking, world. The main purpose of the scheme was to transfer
Mobile Banking etc. subsidies directly into the accounts. Public Sector Banks were
instrumental in opening Jan Dhan Accounts. They organized
Personalised banking and financial services to high net
worth individuals. camps from village to village and worked relentlessly to
achieve the desired results. It was a Herculean Task as every
Dedicated Relationship Manager assigned to the bank was given only 6 months time to achieve a specified
customer. target. Public Sector Banks lived upto the Governments

Door step delivery of loans. expectations.
Customisation of products according to the needs of the
As per data available from Department of Financial services,
customer.
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.

BANKING FINANCE | MAY | 2020 | 27