Finance Minister Sitharaman says banks must ensure their systems speak to each other for better service to customers

Union finance minister Nirmala Sitharaman on Friday exhorted all banks to ensure that their systems "speak" to each other for the benefit of customers.
Customers transact with multiple lenders and are inconvenienced to redo an entire set of processes while starting a relationship with a new lender due to the "wall" created by a lender, Sitharaman said.

"Each of us (banks) have created our own empires. Each of us has got our own digital systems. But that does not talk to the next one," the FM said, addressing bankers' lobby grouping at Indian Banks Association's annual general meeting here.

"It would be such a missed opportunity if we are sitting and thinking that I have created my own and I am happy. Whereas the fellow who deals with you is the one who feels how many walls are there between banks," she added.

Making it clear that her request is directed at both the government-run and private banks, she said for the benefit of the customer, lenders have to ensure that their systems have to speak to each other.

Sitharaman made the suggestion while underlining the importance of creating digitally savvy banks with the right product offerings that take care of requirements for all sections including the youth and also the women.

Banks will have to play a major role in the country's quest to transform itself into a developed nation by the time it celebrates its 100th anniversary as a free country, and the banks have to gear up for the same, she said.

They also need to ensure that web 3.0 and artificial intelligence tools are adopted for an early detection of frauds, she said, adding that the area of cyber security also needs adequate attention through the building of firewalls.

"No fraudulent account will be left without being taken to the court, and banks shall not suffer for the monies that have been taken away by the fraudsters," she said, adding that no fraudsters deserves to be in the country.

In comments that come ahead of the festive season, the FM said there are indications that people are willing to spend on consumption, travel, stays etc and banks have to ensure that correct products are made available and credit requirements are met on time.

Recounting that bankers successfully communicated their concerns with being hounded by investigative agencies like CBI and CVC for legitimate business decisions, Sitharaman urged the bankers to similarly deploy their articulation skills to effectively communicate that they are ready for good business.

Sponsor banks need to immediately help the regional rural banks strengthen their systems and digital tech setups, Sitharaman said.

She also appreciated the work done by lenders like Axis Bank and others to deepen banking reach in the North East.

The FM also asked lenders to ensure that a branch-level staffer speaks the local language of the area he or she is posted in to ensure that business needs are met, and asked why can't a banker learn a new language like Hindi in pursuit of the same?

Lenders need to be more sensible in their recruitment strategies and ensure that those not knowing the regional language are made to work in backend offices and not be present in customer-facing branch offices, she said.

The minister also appreciated the critical role banks played during Covid pandemic in helping the wheels of the economy move, and also helping the common man.

Appreciating the positive role that Banking Correspondents (BCs), especially female BCs, have played in financial inclusion over the years, she said women BCs have been much more productive than their male counterparts, and wanted bankers "to be positively prejudiced to hire more and more women as BCs".