RBI Governor Shri Shaktikanta Das held a meeting today with the CEOs of the public sector banks and the Chief Executive of Indian Banks Association (IBA) on the 19th July 2019.
The Governor acknowledged discernible improvements in the banking sector while underscoring that several challenges still remain to be addressed, particularly with regard to the stressed asset resolution and credit flows to needy sectors.
During the meeting the following issues were discussed:
- Less than desired level of transmission of monetary policy rates;
- Credit and deposit growth on the back of a slowing economy; flow of credit to needy sectors while following prudent lending, robust risk assessment and monitoring standards;
- Improving recovery efforts;
- Giving impetus to resolution of stressed assets facilitated by revised framework for resolution announced by the RBI on June 7, 2019;
- Strengthening internal control mechanism for improved fraud risk management;
- Recent initiatives to address issues relating to NBFCs and the role banks can play in mitigating lingering concerns;
- Deepening digital payments.
The Governor also underlined the importance of expanding and deepening digital payments ecosystem in line with the recommendations of the Report of the Committee on Deepening of Digital Payments (Chairman: Shri Nandan Nilekani) and Reserve Bank’s Payment System Vision Document 2021. In this context, on the suggestion of the Governor, it was agreed that banks will identify one district in each state to make it 100% digitally enabled within a time frame of one year in close co-ordination and collaboration with all stakeholders, including SLBCs, State Governments, Regional offices of RBI, etc. To the extent feasible, such districts may be converged with the 'Transformation of Aspirational Districts' programme of the Government of India. IBA is also expected to play a catalytic role in this regard.
This will mean that we may look forward to see 29 digitally-enabled districts by next year, but banks will have to face challenges in the process, according to experts.
However, the ground realities today with massive penetration of mobiles and increasing reach of internet may pose some challenges to area-based approach to digitisation instead of a service sans borders thrust, feel bankers.
Though specific guidelines are not in public domain yet, the RBI has broadly indicated that “to the extent feasible, such districts may be converged with the Transformation of Aspirational Districts' programme of the Government of India.
The programme aims to quickly and effectively transform some of most underdeveloped districts. Its aim is to ensure rapid development of selected districts in few parameters including health and nutrition, financial inclusion, skill development, agriculture, and infrastructure.