In its 50th year of nationalisation, the banking system is at a crossroads and in need of a thorough revamp. The recent spate of Bank frauds put to test the centralised banking system and the functioning of banks in this competitive financial system. There are checks and balances but still, there are loopholes to plug to provide the best to the clients and at the same time safeguard the interest of the banks. Indira Gandhi was instrumental in nationalising 14 banks on July 19, 1969. In 1980, six more private banks were nationalised taking the number of Nationalised Banks to 20. In the 50 years, the Bank branches have come in every nook and corner of the country and banking has touched new horizons in this period.
Indian Banking touched a new horizon and continues to be at the forefront of technological innovation to provide simplicity and convenience in banking, in line with RBI guidelines and policies of the government. This has helped the banks to build a robust pipeline of innovative products and services and consolidates its position as a financial hub with an aim to reach out to the public in the best way possible. With cutting edge technology, wide distribution network and energetic workforce, banks continue to have high degree competition.
The Indian banking sector is passing through a phase that is both challenging and exciting. Over the last four decades, banks have substantially strengthened its retail and rural business, as evidenced both by its strong deposit franchise and funding profiles, and stable asset quality in the banking sector. The global economy experienced challenging conditions in fiscal 2016, with weak growth and divergent monetary policies in advances economies, slowdown in China and significant decline in commodity prices. In these periods, we witnessed healthy growth in the banking industry. The Indian economy is poised to build on the progress made in the banking portfolio over a period of time and is well positioned to address the challenges in a most clinical way. The spadework has already been done and it is time to reap rich harvest with a consistent approach.
The wholesale banking group will continue to focus on enhancing the quality of the portfolio and the quality of earnings by further developing banking expertise in promoting new products and technology to meet client requirements and leverage growth opportunities in the best way possible. In the SME segment in India, the Banking sector continued to leverage its presence to grow in a more granular manner and enabled a large number of entrepreneurs to participate in the emerging economic opportunities.
(This is the first part of the Diary and the latter part will continue tomorrow.)
(The views expressed by the author in the article are his/her own.)