next phase of transformation in banks

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Next phase of transformation in banks 1. Shridhar Agarwal 2. Nirbhay Bade 5. Vinayak Bhutada 9. Aashay Chitre 11. Snehal Dalvi 13. Swapnil Deshmukh

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Page 1: Next phase of transformation in banks

Next phase of transformation in banks

1. Shridhar Agarwal2. Nirbhay Bade5. Vinayak Bhutada9. Aashay Chitre11. Snehal Dalvi13. Swapnil Deshmukh

Page 2: Next phase of transformation in banks

Financial Inclusion

Swabhimaan program Jan-Dhan yojana Direct benefit transfer-JAM trinity, PAHAL Payment banks 100% FDI in white label ATM

Page 3: Next phase of transformation in banks

Dr. Nachiket Mor committee

To re-engineer Indian banking architecture Principle licenses to 11 payment banks Principle licenses to 10 Small finance banks Liberalized branch licensing policy ‘Indradhanush’ framework

Page 4: Next phase of transformation in banks

Performance of banks

• Indicates better quality performance of PvSB compared to PSB

CASA CD Ratio Non SLR investment

Investment to deposit

ratio

0102030405060708090

PSB vs PvSB

PSB PvSB

Page 5: Next phase of transformation in banks

Ratios impacting market valuation

ROA

ROE

Operat

ing pr

ofit to

Assets r

atio

0

4

8

12

16

PSB vs PvSB

PSB PvSB

Page 6: Next phase of transformation in banks

Reasons for differentiated performance

Systematic control on level of performance of human capital PSB- socio economic development Stress on asset quality & consequent pressure on capital adequacy are

concern for PSB For PSB reforms needed in performance management system: Style of people governance Decision support system Top down management hierarchy Better leadership orientation

Page 7: Next phase of transformation in banks

Challenges

Entry of new financial intermediaries Diminishing overall profitability Asset quality (Kingfisher) High attrition rate Inadequate talent management system Implementation of Basel –III standard (Capital Adequacy of bank) Prevention of fraud (Bhushan Steel case)

Page 8: Next phase of transformation in banks

Indradhanush Seven strategic initiatives:1. Appointments of MD & CEOs in PSBs 2. Bank Board Bureau3. Capitalization of PSBs4. De-stressing PSBs5. Empowerment6. Frame of accountability7. Governance reforms

Page 9: Next phase of transformation in banks

Emerging Scope for business Digital India Swatch Bharat Make in India Housing for all Gold monetization scheme Direct benefit transfer Jan Suraksha yojana

Page 10: Next phase of transformation in banks

Thank You.