When I first started visiting our Bank with my mother, I had met a lady behind the counter who used to stitch woolen sweaters around the year. She would sit there at her designated seat, oblivious of the world around, stitching, as though it was the most important thing in the world. As I grew up, in tandem with the transition of the Indian economy, our little bank branch too got computerized – which meant that the lady dumped her stitching and graduated to playing Solitaire. Her healthy disdain for the customers remained intact, as she continued to ignore us from behind the monitor that now separated the computerized branch and its hapless customers.
I know it is wrong to generalize things so drastically and it is a slur on the people who literally slog it out in branches at the back of beyond to ensure that the wheels of banking are in motion, but it is just that the lady and her blank stares and her icy wall of indifference is somehow etched in my mind forever – like the pan-stained and strike announcing, poster bedecked walls. It is this indolent indifference that is the biggest hindrance to Banking in India. Yes, the so-called private banks have “friendly” client relation officers that treat the customers as “Kings” – but then again, like the skeptics say, there is also the King’s ransom to contend with, that too, if they are available in the first place.
If this is what the bank looks like to an ordinary Savings Account holder in one of the unknown branches, the picture is equally despicable to a small entrepreneur seeking a loan as I learnt accompanying my father to the branches higher up. Manned by people whose sole purpose in life seemed to create hurdles between my father and the loan he coveted, till we “hired” the services of a “go-between” who knew the “shortcuts”. Yes I know that the officers we dealt with were as much victims of the circumstances as were and were only bothered about sticking to the strictures, as, any deviation would have surely put their career paths (and retirement benefits to boot) on jeopardy, had the loan advanced by them gone sour. This line of reason does not explain how the “uncle” fixed everything up for a fee we could not show in our books of accounts, but that is another story.
Yet, despite the best efforts of those who are supposed to ensure that the scattered savings of the Nation are put into gainful enterprise to shoo away customers like my father, loans do get sanctioned. Loans, that go “bad” with equal alacrity. Banks fondly call them Non Performing Assets, obliquely referring to their quality. NPA’s that straddle the Balance Sheets and are at a stage where they are beyond accounting jugglery and Balance Sheet recasts. Turns out, that the lack of collateral, that had turned my father into a nervous wreck wasn’t after all, such a big deal, especially for the big guys with their big ticket arrangements. The “uncle” who had bailed my father out, is now working overtime, may his tribe increase.
So much for Asset Quality, now for Capital Adequacy. Again at the risk of oversimplification, it is the statutorily fixed minimum reserve of capital that should be available to the bank. Now consider the fact that till date, we have not been able to address the banking needs of about half the Nation’s households. Viewed in the backdrop of our avowed destination of financial inclusion (delivery of financial services at affordable costs to sections of disadvantaged and low income segments of the society) the figures just don’t add up (blame my poor maths). From where I stand, with my little knowledge (that too gathered from what I read in the newspapers); there just won’t be enough money in the banking system either for meeting the norms or for meeting the obligations of inclusion. Add to it the sheer cost of logistics that will be needed to be borne to ensure the kind of banking penetration that we desire and the enormity of the problem will start to come into sharper focus.
When I talked to one senior banker while writing this piece, he sang hosannas about the Kenyan Model – whereby India can use her teledensity (read penetration of mobile phones) to reach out and embrace the country in a huge bear hug of financial inclusion. Sure, but then again, more Indians have mobile phones than they have access to safe sanitation. The optimism sounds a bit warped, even by Indian standards and here too, time will be the crucial, determining factor.
And it is time that we do not have. Middle India, with her larger than life aspirations, ready to reap the demographic dividend and aspiring for an instant transformation to developed nation facilities, is becoming restless. We can’t get enough capital overnight, cannot turn out Balance Sheets devoid of NPA’s, and Financial Inclusion is another chimera to put things mildly. But we can address the fourth problem that, according to experts, cripples the banking sector: that of a huge gap of trained manpower. Let us replace the lady at the counter with a robot.
The piece was originally written for the Financial Express BFSI@Kolkata.
Tristha Sharma has completed her graduation in commerce and a diploma course in Corporate Communications from BESC a leading educational institution in the city. Hailing from a business family, she is a keen watcher of the economy trying to make sense of the financial chaos that is out to engulf her. She is often angry – at the way we shrug off obvious wrongs and instances of blatant corruption in the most nonchalant of ways – which forces her to think, about ways and means that can lead the nation to deliverance. Tristha writes in her spare time, packing her pieces with the punch of her inimitable wry sarcasm – an art she wants to perfect, for she believes, that effective communication, which ultimately leads to the generation of awareness among the public, is the key to all our owes … well, almost.
Note, how none of the issues raised by Tristha have been addressed by Demonitisation, which happened, after this piece was penned – Editor.