Speaking after inaugurating national conference on “Contemporary issues in banking” organised by Department of Commerce, Manipal University, here at MIT on Tuesday, he said government measures like loan waiving schemes as relief measures for farmers is nothing but the measure that encourages financial indiscipline. This is a big task for banking sector. Law should take action against those who don’t abide by contractual obligations. Sarcastically, contractual obligation in India is the last priority. Government should take care of loans that are made to pay on time. Financial inclusion is the need of hour. There are 60 crores of eligible people in India for bank accounts, however, 40 per cent of these don’t have bank accounts, he said.
KYC (know your customer) and AMOL (Anti Money Ordering Law) is very much essential in the financial inclusion process. As India has huge number of migratory population and influx of people from other countries, monitoring the identity of customers is a herculean task, he added.
Stating that Indian banks today are confronting the problem of shortage of human resources, he said the following two decades of 1970s witnessed major expansion of banking sectors. The number of branches went up to 45,000 from 5,000. There are nearly 62,000 to 65,000 commercial bank branches and about 10 lakh employees. However, 40 to 50 per cent of the employees are retiring in next 2 to 3 years creating void in the area of skilled and talented working sections, he added.
In the coming 8 to 10 years, Indian banks will have 40 lakh crore of mortgage loans, as many as 50 crores of new customers, besides threats form merger and amalgamation of banking sectors. Customer relation management and margins of banks will be under pressure. However, there will be 20 lakh crores of infrastructural lending in the next five years, he added.
Briefing on the current scenario of finance and banking, he informed there are 65,000 bank branches across the country. There are as many as 48 lakh crores deposits, 37 lakh crores of bank credit advances and 15 lakh crore of investments. It caters to the employment needs of 10 lakh working force.
Syndicate Bank General Manager Devananda Upadhyaya said public banks are reliable, besides being customer-friendly. All other models of delivery like micro finance system introduced by government have failed miserably. Size of the bank is not the issue, rather it is the efficiency that matters the most, he added.