FM Nirmala Sitharaman to launch EASE 4.0 to institutionalise smart banking

Finance Minister Nirmala Sitharaman will be visiting Mumbai on Wednesday for an annual performance review of public sector banks (PSBs). The review will be of the financial performance of public sector lenders and will check the progress made by them in supporting the pandemic-hit economy.

Sitharaman will meet the MD and CEOs of banks for the same and this meet assumes significance given the role of the banking sector in boosting consumption and generating demand.

The finance minister will launch  EASE 4.0 (Enhanced Access and Service Excellence) later in the day.

Here’s all you need to know

EASE 4.0 is part of government reforms for PSBs which have been facing numerous issues. The reform measures are aimed at institutionalising smart and clean banking.

The government is looking to strengthen corporate governance and human resource practices of public sector banks.

What to expect from EASE 4.0?

EASE 4.0 is likely to be launched with the aim that the focus of PSBs should be on promoting new analytics-based offer to customers. This could include pre-approved car loans, EMI offers on e-commerce purchases.

Under this, banks can leverage partnerships with third parties like agri-tech firms,. There could be enhanced focus on sanction of agricultural loans based on a field visit and risk assessment in states with digitised land records.

The government is considering measures to further strengthen corporate governance and human resource practices

For the co-lending model with non-banking finance companies (NBFC), banks will have 80% exposure, while NBFCs will provide customer service and grievance redressal.

FM is expected to declare the results of the EASE 3.0 Index for FY21, wherein PSBs are likely to have been rated on various indexes for the year.

Finance Minister is also expected to review progress made by banks to promote Emergency Credit Line Guarantee Scheme (ECLGS) launched by the government under series of stimulus packages since March last year.

All about EASE reforms

The first edition EASE 1.0 was launched in January 2018.  The reforms were devised on recommendations of PSB Manthan (November 2017) with the agenda “Responsive and Responsible PSBs”. The meet involved senior management of PSBs and representatives from government.

EASE reforms primarily focuses on six broad themes. These include customer responsiveness as well as responsible banking. It also focuses on improving credit off take and deepening financial inclusion. EASE reforms also undertake digitalisation of  PSBs.

EASE 2.0 and EASE 3.0 followed in the next two years which sought to improve ease of banking in customer experiences. This was to be achieved by using technology, alternate data and analytics.  EASE 3.0 set the agenda and roadmap for FY21 for their transformation into digital and data-driven NextGen ‘Banking of the Future’ for an aspiring India.

Finance Minister has maintained that Public Sector Banks have played a great role in enabling financial inclusion in the country.