IDBI Bank Current Affairs - 2020
The BCG-IBA report EASE Reforms for Public Sector Banks measures the performance of each PSB on 140 objective metrics across 6 themes. The 6 themes are:
- Customer Responsiveness: EASE for customer comfort
- Responsible Banking: Financial stability, governance for ensuring outcomes, and EASE for clean & commercially prudent business
- Credit Off-take: EASE for the borrower and proactive delivery of credit
- PSBs as UdyamiMitra: EASE of financing and bill discounting for MSMEs
- Deepening Financial Inclusion & Digitalisation: EASE through near-home banking, microinsurance and digitalisation
- Ensuring outcomes – HR: Developing personnel for Brand PSB.
Findings of the Report
- Punjab National Bank has been ranked first among public sector banks in the implementation of ‘reforms agenda’, followed by Bank of Baroda and State Bank of India.
- Punjab National Bank with a score of 78.4 out of 100 has been ranked first under the theme of EASE (Enhanced Access & Service Excellence). PNB is followed by BoB (77.8), SBI (74.6), Oriental Bank of Commerce (69), Canara Bank (67.5) and Syndicate Bank (67.1).
- The six Public sector banks which are under PCA framework of the RBI have also been ranked under the Index. The performance of PSBs is as shown Indian Overseas Bank (66.7), UCO Bank (64.1), United Bank of India (60.8), IDBI Bank (60.2), Central Bank of India (55.7) and Dena Bank (53.8).
The government had announced in January 2018 that the government would come out with EASE -Index for ranking of banks aimed at increasing the public accountability of PSBs as independent agencies evaluate and rank PSBs annually on reforms.
The report has been commissioned through Indian Banks’ Association and authored by BCG with Forrester Inc., Kantar IMRB and TransUnion CIBIL as knowledge partners.
Tags: Bank of Baroda • Canara Bank • Central Bank of India • Dena Bank • EASE Index Report
The government has approved the capital infusion of Rs. 48,239 Crore into 12 State-Run Banks. The capital inclusion has been undertaken to ensure the lenders are able to maintain regulatory capital requirement and step up lending and boost overall growth.
With this latest capital infusion, the government has now the government has now provided Rs 1,00,958 crore out of the Rs 1.06-lakh-crore bank recapitalisation plan. The remaining Rs. 5,000 crore capital infusion would be used as a buffer for any contingency or growth capital for Bank of Baroda which is in the process of merging Dena Bank and Vijaya Bank with itself.
How the capital infusion will benefit these PSBs?
RBI has lifted the curbs under the Prompt Corrective Action framework on Bank of India (BoI), Bank of Maharashtra (BoM) and Oriental Bank of Commerce (OBC) in early 2019. Eight other PSBs — Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Central Bank of India, Indian Overseas Bank and Dena Bank are still under PCA. PCA imposes curbs on expansion activities, among a number of other restrictions to help them get back to fiscal health.
The capital infusion has been undertaken to ensure that state-run lenders, which have emerged out of the PCA, remain above the triggers and help others such as Indian Overseas Bank, Central Bank, United Bank and UCO Bank meet minimum regulatory capital requirements.