Public sector banks (PSBs) need to prepare a road map for appropriate and timely capital raising, work on efficient allocation of resources, and strive to bring down intermediation costs, said M Nagaraju, secretary, Department of Financial Services.
Each bank has its own unique set of challenges, manpower, systems, capabilities, and infrastructure. They must judiciously identify benchmarks across various financial criteria, he said while addressing the annual general meeting of the Indian Banks Association (IBA) on Monday.
State-owned lenders are well positioned to share best practices and collaborate on business and efficiency enhancement processes due to inherent similarities among them on multiple fronts. The synergy arising from this will not only nurture them individually but also elevate their collective standing in improving services.
However, progress on collaboration or alliances in service offerings and common banking performance metrics has been somewhat limited, he observed.
Banks will need to step up their efforts to make services more robust and user-friendly. They must focus on productive initiatives in cybersecurity, technological platforms for risk management, and strengthening applications of artificial intelligence-based analytics, financial technology incubation, and more, he added.
Referring to a string of IBA-led initiatives, Nagaraju said the association has contributed to developing entities such as the National Asset Reconstruction Company and PSB Alliance, which engages in activities like doorstep banking.
Now, IBAs productivity needs to be intensified in several areas. The industry body must play a pivotal role in strengthening the regulatory framework and fostering trust within the industry. It could work on establishing uniform standards for ethical conduct, professional practices, and operational procedures to ensure consistency across banking institutions.
He urged the IBA to act as a bridge between banks, the government, and the regulator to facilitate dialogue on policy matters and ensure alignment with national priorities.
Abhijit Lele, Business Standard
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