Shri Jayant Sinha, Minister of State for Finance said that two day Bankers’ Retreat is a ground breaking workshop as it is the first time when the entire Financial sector ecosystem has come together.  So this is a unique opportunity to reshape the financial sector for next 10 to 15 years, he added. Shri Jayant Sinha , MOS (Finance) was speaking after inaugurating the two days “Retreat for Banks and Financial Institutions” called “ज्ञान संगम” “Gyan Sangam”at Pune, Maharashtra today.He said that we are running againstthe time as the changes in the economic environment are taking place at a very rapid pace. He said, therefore, economic reforms including in banking sector are required to be taken-up urgently on utmost priority.

Outlining the economic philosophy of the present Government, Shri Sinha said that his  Government believes in Empowerment and not entitlement. He said that as opposed to rights based approach of the previous Government. He said that the new Government is seeking to empower people so that they can live with dignity. He highlighted that the Financial Inclusion brought about by Pradhan Mantri Jan DhanYojana (PMJDY) would provide empowerment to the people to use financial sector tools for their up-liftment.  Besides it, the present Government believes in Good Governance following the principle of Minimum Government and Maximum Governance. He said that idea of governance arises fundamentally from people and Government acts as a facilitator. Systems are being made transparent and rule-based, he added.

Shri Jayant Sinha, MOS (Finance) further said that the present Government is of the poor while being pro-business at the same time. He stated that though this is Govt. of the poor, but at the same time it is a pro-business Government. So the trade-off has to be managed by ensuring that the PSBs are able to function commercially while financing the poor as well. He expected that the whole group will work collectively in collaboration so as to increase social capital across the ecosystem and he expected that the group would crystallise key action steps which could then be presented before the Hon’ble Prime minister and Finance Minister. He inspired the group to provide bold and creative suggestions which could lead the economy back to 7 – 8% sustainable and non-inflationary growth in GDP. He further stated that we are in a race against time as millions of jobs are required to be provided urgently and thus we need to work together and collaborate across different boundaries and silos.

Earlier in his welcome address, Dr. Hasmukh Adhia, Secretary, Department of Financial Services(DFS),Ministry of Finance said that the entire idea of organising this retreat emerges out of the need for banking sector reforms. The purpose of retreat is to find the answers collectively as to how, where and when the reforms are put in place to make the banking system robust, he added. Dr Adhia said that this retreat is a format for complete stake holders’ consultation. This informal format will break the silos in which different stakeholders like Govt., practitioners and regulators normally function. He emphasized that this retreat is an exercise to learn from each other and help each other in solving the problems. And this would involve the highest level sensitisation of issues among all the Government officers, Banks, Financial Institutions, regulators including IRDA, PFRDA and RBI. He suggested that groups should bring-out key five doable suggestions from each theme area.

Shri. H R Khan, Deputy Governor, RBI in his welcome remarks stated that it is  a perfect setting for all of us to hope for reforms which can take the banking system out of this current adverse situation because all the experts, practitioners and regulators  are gathered at one place. Participants in the Bankers’ Retreat included among others Regulators, Officers of the Ministry of Finance, Top Management of all Public Sector Banks (PSBs), Insurance Companies and Financial Institutions(FIs), NIBM and CAFRAL.

NIBM Director Dr. Achintan Bhattacharya and Dr Gopalkrishna, Direcor CAFRAL welcomed MOS(Fin) and all other participants in the  retreat .

The programme included a separate session devoted to sharing of the Best Practices followed by different Banks. ‘Learning from each other’ was major objective of this session.  The following best practices were shared in that session:

• Axis Bank - the Mobile Youth account Retail banking Product design based on life insights.
• IDBI Bank - The Electronically secured bank and treasury receipts and Payments. This also includes electronification of Government receipts for the customers.
• State bank of India –A Specialized cadre of IT function.  This has created a viable track for specialist talent in public sector banking.
• Andhra Bank – The Objective Key Result Areas (KRA) and Key Performance Indicators (KPI) for a transparent and IT enabled evaluation system of Human Resources. In this system the officers can generate their own annual performance appraisal report.

Before the group discussions McKinsey made the presentation on international best practices in banking .They also suggested the groups to focus on the outcomes related to access, efficiency, stability, profitability/value creation and growth.

The six main themes for group discussions are;

1. Achieving universal Financial Inclusion.
2. Leveraging Technology and digitalisation to improve banking operations efficiency.
3. Rethinking Priority sector lending.
4. Improving Risk management, asset Quality and recovery.
5. Building a robust people strategy for PSBs.
6. Consolidation and restructuring of PSBs for better efficiency , governments and capital efficiency

These groups are in the process of discussions (which would continue even after dinner) and finalise their reports which would be presented before the Hon’ble Finance Minister on 3rd January 2015. These reports would then be compressed into three presentations which would be made by CMDs before the Hon’ble Prime Minister on 3rd January, 2015.

Banking sector reforms to enable commercial functioning of public banks while expanding financial inclusion and governance. Urgent banking sector reforms are required to enable PSBs to function commercially while financing the poor; the Government's approach emphasises Empowerment, Good Governance and Financial Inclusion as facilitative tools. A stakeholder retreat convenes regulators, ministry officials, bank management and institutions to produce actionable recommendations across six thematic areas: universal financial inclusion; technology and digitalisation; priority sector lending; risk management and asset quality; people strategy for PSBs; and consolidation and restructuring for efficiency and capital optimisation.