State-run banks are proposing to create a central talent pool and finalise a three-year business strategy for individual banks, aiming to improve their performance and competitiveness.
This talent pool will have senior-level domain experts from all public sector banks (PSBs) and will look to build peer-to-peer collaboration by sharing technology, operations and people capabilities, a senior bank executive said. “This team would further work across with all banks, and guide, handhold and coach lagging banks to achieve the set targets,” he added.
The broad agreement is that Indian Bank will lead this initiative for Chennai and Bengaluru-based banks, and Punjab National Bank for Delhi-Kolkata PSBs. For Mumbai-Pune banks, State Bank of India and Bank of Baroda will jointly lead the programme.
“Banks through these groupings will also identify areas of external collaboration including ecommerce, account aggregators and external digital platforms for common benefit,” said another executive aware of the development.
In April, after the PSB Manthan conclave, the government asked PSBs to set up a three-year roadmap for their business strategy and suggested that they explore more collaboration among themselves, with larger banks sharing best practices with smaller ones and guiding them in areas where they need expertise.
Accordingly, six groups were formed to look at and suggest measures for key focus areas including customer service , digitisation, HR incentives, governance and collaboration.
PSBs have witnessed a turnaround in the last few years. They have recovered ₹5.17 lakh crore of non-performing assets and ₹1.24 lakh crore in written-off accounts since FY15. The gross NPA ratio of PSBs has improved from 14.6% on March 31, 2018, to 7.4% on March 31, 2022, while the net NPA ratio recovered from 8% to 2%. Stressed assets are down from 15.3% to 8.7%.
Source: Economic Times