PSBs to drive co-lending with NBFCs, digital, agri financing under Ease 4.0 reform

Nirmala Sitharaman Co-lending with non-banking companies, digital, agriculture financing, and technological resilience for 24x7 banking are likely to be part of Ease 4.0 Index, a reform agenda for 2021-22 for public sector banks, sources said.

Initiated in January 2018, Enhanced Access and Service Excellence (Ease) is the common reform agenda for all public sector banks (PSBs) aimed at institutionalising clean and smart banking.

Ease 4.0 reforms agenda for financial year 2021-22 is expected to be unveiled by Finance Minister Nirmala Sitharaman later this week, sources said.

She is expected to announce the results of Ease 3.0 Index for 2020-21, they said, adding that PSBs would be rated on diverse indexes for the year.

Sources said, this year PSBs would focus on introducing and promoting new analytics-based offers to existing retail customers like pre-approved car loans, EMI offers on e-commerce purchases and also for existing MSME customers.

Such bids will be based on bank transactions, income tax and GST returns, transactions on e-commerce portals, and other operational data, they added.

According to the proposed reform agenda, banks would leverage partnerships with third parties, including agritech firms and strive to automate processing and sanction of agricultural loans based on field visit, borrower interaction, and risk assessment in states with digitised land records.

Under the co-lending model with non-banking finance firms, banks will take 80 per cent exposure, while NBFCs will provide customer service and grievance redressal.

The Finance Minister is scheduled to meet heads of PSBs on August 25 to review financial performance of the lenders and progress made by them to enhance the economy battered by COVID-19 pandemic.

Given the importance of the banking segment in generating demand and boosting consumption, sources said the meeting with MDs and CEOs of PSBs is considered important.

The Finance Minister is going to review progress made by banks to endorse schemes including Emergency Credit Line Guarantee Scheme (ECLGS) and PM Street Vendor's AatmaNirbhar Nidhi (PM SVANidhi) disclosed by the government under series of stimulus packages since March last year.

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