FinMin uses videoconferencing to stay in touch with PSU banks
Aug 08 2012 , New Delhi
Tags: News
Mittal goes online regularly to seek updates, exchange views on issues
After sending a series of letters to public sector banks directing them to prune bulk deposits and asking them for consortium lending for loans over Rs 150 crore, the ministry of finance has found an effective tool of communication –– videoconferencing. The financial services secretary DK Mittal comes online for a long chat with top public sector bankers seeking updates and exchanging views on vexing issues such as financial inclusion and priority sector lending limits.
On Tuesday (August 7), all the chairpersons and executive directors of the south-based banks were all online with the financial services secretary, additional secretary SS Soni and joint secretary Umesh Kumar, discussing the progress of the pooling together of the ATMs to be managed by a common set of vendors and also pooling together the business correspondents for financial inclusion. The videoconference that began at around 11am went on for over two hours as the discussions veered around several allied subjects.
Senior bankers told Financial Chronicle that the finance secretary has been videoconferencing with officials of public sector banks over last two months, to ensure that banks meet their financial inclusion targets, priority sector limits and agricultural loans. The Tuesday’s meeting was the first where five banks Corporation Bank, Canara Bank, Indian Overseas Bank, Andhra Bank and Syndicate Banks were called together for the video conferencing, unlike the earlier ones where the ministry dealt with individual banks.
A chairman of a public sector bank told FC that the government is serious about meeting its financial inclusion target so they are constantly in touch with the banks. “The target is to get an bank account for every household in India, for which the banks have to gear up with plans and progress of their plans. First they will run it as a pilot project in certain districts and then, roll it out in the remaining states so banks have to be prepared for it," he said.
The RBI, however, seems concerned about ministry’s regular interference. At the Nabard foundation day lecture on July 12, RBI governor D Subbarao said, “It would serve banks better if the government pushes decision through the boards.” There are government representatives on the boards of all the public sector banks.
The general view of bankers is that the ministry should best give a macro view rather than trying to micro-manage and give frequent directions to the banks as it diverts their attention from regular business activities.
Some of the directions sent by the ministry on consortium lending approach for large corporate accounts will help banks to spread the risks rather than getting concentrated on a single bank. There were also other directives too. For instance, if one bank classifies an account as a NPA, all other banks have to classify that specific borrower’s account as an NPA, not to give short-term collateral free loans and the latest directive was on reducing the bulk deposit to about 15 per cent of total deposits by September.
But the ministry again wrote to the banks to ignore the letter, asking them to wait for wait for detailed asset liability guidelines.
On Tuesday (August 7), all the chairpersons and executive directors of the south-based banks were all online with the financial services secretary, additional secretary SS Soni and joint secretary Umesh Kumar, discussing the progress of the pooling together of the ATMs to be managed by a common set of vendors and also pooling together the business correspondents for financial inclusion. The videoconference that began at around 11am went on for over two hours as the discussions veered around several allied subjects.
Senior bankers told Financial Chronicle that the finance secretary has been videoconferencing with officials of public sector banks over last two months, to ensure that banks meet their financial inclusion targets, priority sector limits and agricultural loans. The Tuesday’s meeting was the first where five banks Corporation Bank, Canara Bank, Indian Overseas Bank, Andhra Bank and Syndicate Banks were called together for the video conferencing, unlike the earlier ones where the ministry dealt with individual banks.
A chairman of a public sector bank told FC that the government is serious about meeting its financial inclusion target so they are constantly in touch with the banks. “The target is to get an bank account for every household in India, for which the banks have to gear up with plans and progress of their plans. First they will run it as a pilot project in certain districts and then, roll it out in the remaining states so banks have to be prepared for it," he said.
The RBI, however, seems concerned about ministry’s regular interference. At the Nabard foundation day lecture on July 12, RBI governor D Subbarao said, “It would serve banks better if the government pushes decision through the boards.” There are government representatives on the boards of all the public sector banks.
The general view of bankers is that the ministry should best give a macro view rather than trying to micro-manage and give frequent directions to the banks as it diverts their attention from regular business activities.
Some of the directions sent by the ministry on consortium lending approach for large corporate accounts will help banks to spread the risks rather than getting concentrated on a single bank. There were also other directives too. For instance, if one bank classifies an account as a NPA, all other banks have to classify that specific borrower’s account as an NPA, not to give short-term collateral free loans and the latest directive was on reducing the bulk deposit to about 15 per cent of total deposits by September.
But the ministry again wrote to the banks to ignore the letter, asking them to wait for wait for detailed asset liability guidelines.
PSB chiefs to meet FM this month; to seek for clarity on accountability
collected from news paper daily 'Indian Express'
Chiefs of public sector banks (PSBs) are hoping for some clarity on their accountability when they meet finance minister P Chidambaram later this month, following the recent tussle between the central bank and the finance ministry over the issue.
While the meeting, slated for August 18 is the newly appointed finance minister’s first meeting with PSB chiefs, it comes at a time when Reserve Bank of India Governor D Subbarao has expressed displeasure over the government sending regular policy directives independently of the banking regulator.
While Subbarao had stressed that the government should try to restrict its ownership rights in banks through their boards, DK Mittal, secretary, department of financial services is known for regularly sending missives to PSBs.
The meeting comes in the backdrop of high interest rates that are choking industrial production and consumer demand along with a possibility of drought in the country, which will increase the non performing assets of the banks. Chidambaram, who has recently taken over the reigns of the finance ministry, is taking stock of the economy to help revive the growth momentum.
“It is largely expected to review their performance as well as discuss problems being faced by them given that there is not enough credit off take and deficient rains,” said a source close to the development.
Besides, the capital requirement needs of banks to meet Basel III norms as well issues relating to financial inclusion are also likely to feature on the agenda. The finance minister is also expected to take a review of the design and product pricing of insurance policies, the source said. Pension Fund Regulatory and Development Authority chief Yogesh Aggarwal is also expected to attend the meeting.
http://www.indianexpress.com/news/psb-chiefs-to-meet-fm-this-month;-to-seek-for-clarity-on-accountability/985738/
It's great tool and the word described above as an effective tool of communication –– Video Conferencing Software is absolutely perfect to describe advantages of it in a single word. That's a better option to communicate among huge number of banks and departments.
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