Fourteen major banks were nationalised in 1969, and some more were nationalised a few year later. Since then banks have to come to play a major role in the socio-economic life of the country. They are no longer merely instruments for credit mobilisation and money-lending.
They are no longer merely institutions for earning maximum profits for the benefits of a few individuals. They are now powerful source of economic growth and social justice.
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Shri H. C. Sunkar very pertinently remarked “Banks have to act not only as purveyors of credit, but also as harbingers of social and economic development through a variety of enterprises, many of which may be tiny and yet capable of generating productive energies.”
The role of banks has changed; still the quality of banking services in India remains poor. A bank transaction is a time consuming affairs, causing much harassment and irritation to the clients.
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There are frequent exchanges of hot words with concerned clerks, and there have been instances when even blows have been traded. To avoid such delays and frustrations.
It is essential that the Teller System be introduced in all major banks at the earliest. Computerization of banking services should also be done in the interest of efficiency and promptness. However, this will have to be done with due forethought and care as the Employees Unions are generally opposed to it.
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Courteous, sincere and duty conscious staff is also must, if the banks are to play their due role in life of the country. At present the staff, even in the major nationalised banks, is not only inefficient and rude, but is also lacking in sense of duty and decorum loan.
For mobilisation of deposits, it is essential that they are made aware of the fact that it is in their interest to deposit money in the banks.
The people, especially in rural areas, should be assured that the money deposited in banks is entirely safe and they can withdraw it in their troubled time. Even small investors should be tapped through such door to door approach.
People in general, especially women, are of the view that it is more profitable to invest money in the purchase of gold than to put money in banks.
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To mobilise deposits schemes such as attractive Re-investment Plan, Recurring Deposit Scheme, Retirement Plan, Permanent Plan etc. should be promoted. Secondly the small depositors should be given education in banking.
They have to be assured that their money in the banks is as good as in their purse, that the process of withdrawal is not difficult and that there are a number of additional benefits, apart from the interest accruing from bank deposits. Such education to the people is very essential for the rapid mobilisation of deposits.
It is only when maximum deposits are mobilised that the bank would be able to liberalise their lending policy and play a creative role in national life. It is essential that loans are advanced to small entrepreneurs and the self-employed on easy liberal terms.
The criterion should not be paying capacity of the borrower, but whether the loan so advanced is likely to help in increasing production. If it is so, loans should be advanced even if sometimes there is a default in the payment of due installments. Banks Managers should make judicious use of their discretionary powers in this connection.
Banking services should be extended to rural areas also. We are happy to note that during the last few years more and more banks have opened their branches in the villages. The establishment of Rural Development Bank is a step in the right direction. Still much more remains to be done.
The task of providing banking facilities to the rural folk should be taken on a war footing. The advantages of banking should be explained to the rural dwellers that are ignorant and conservative. Deposits should be mobilised and loans should be advanced on liberal terms.
This would enable agriculturist to purchase good quality seeds fertilizers, and scientific implements like tractors, thrashers etc. This would result in increased production. In this way the Indian farmer would be freed from the clutches of the local money lender and his traditional poverty would be gradually eradicated.
India is on the march; far reaching socio economic changes are taking place and Indian Banks should come forward to play this role in the process. But this can be possible only if the quality of banking services is considerably improved.