State-run banks told to draw up 3-year road map

The finance ministry has asked all state-run banks to draw up a strategic road map for three years starting fiscal 2024, government officials said.

In a directive sent last month, the government asked the public sector banks (PSBs) to define achievable goals, and identify new initiatives and create an action plan to meet those.

A number of such initiatives will be part of the Enhanced Access and Service Excellence (EASENext) reform version 6.0, which will be launched in April, a senior government official told ET.


"Banks in the last two years have performed exceedingly well, and this is the next stage of growth for PSBs. We would like them to focus on areas like improving asset quality, investments in IT infrastructure, the adoption of new-age technology solutions and the functioning of digital banking units," said the official.

A bank executive said in the last few years, the government has been nudging lenders to review their non-core businesses with focus on improving financial performance. The road map, to be submitted by the banks, could provide details of such possible exits.

Another banker said the new focus areas will include PSBs using big data analytics to make data-driven decisions that can improve business-related outcomes. "This will involve more effective marketing, new revenue opportunities, customer personalisation, and improved operational efficiencies," he said.

Last year at the launch of digital banking units, Prime Minister Narendra Modi said the economy of any country is as progressive as its banking system is strong and that fintech would lead to a financial revolution.

"If Jan Dhan accounts had laid the foundation of financial inclusion in the country, then fintech would form the basis of financial revolution," he said while dedicating 75 digital banking units in as many districts.

Under Ease 5.0, PSBs were to explore internal collaboration, including geography and business-specific opportunities, and were evaluated on various parameters, including HR reforms, digitalisation, technology, risk and customer service.

PSBs' profit is expected to touch around ₹1 lakh crore this fiscal year, up from ₹66,539 crore in FY22. The country's largest bank, State Bank of India, posted its highest ever quarterly profit of ₹14,205.34 crore, up 68.5% from a year earlier, in the three months through December 2022.