Editorial : State-owned banks, reinvent yourself

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Banking frauds have reportedly cost nationalised banks as much as Rs. 25,775 crore, in the last fiscal(वित्तीय/राजकर-संबंधी) alone. It is also a fact that public sector banks (PSB) have a much higher share of non-performing loans than their private sector counterparts(समकक्षों). Turnaround would call for not just

overhaul of oversight and managerial(प्रबंधकीय/शासकीय) systems, but also path-breaking innovation(नवीनता/नई पद्धति)) to cope with new headwinds(विपरीत परिस्थितियों)facing banks. There are other challenges. Savers are deserting(छोड़ देना/हट जाना) banks to increasingly(तेजी से/बढ़ता हुआ) prefer mutual funds. Larger corporates are now required to gainfully tap the bond market, even as nimble(चुस्त/चतुर) fintech firms leverage technology to provide better access to standard banking products like loans, at fine rates.

Traditional banks, especially PSBs, need to proactively(पूरी सक्रियता) innovate to stayrelevant(प्रस्तुत/उचित). The way forward is to boost fee-based income and services and phase out excessive reliance on interest income. In tandem, there’s the pressing need to better leverage data to upend shrinking customer base. The projection is that 50 million small and medium enterprises (SME), which now mostly rely on informal sources of funding, are slated to seek bank funding, by 2020. But such SMEs may not have the ready collateral(अतिरिक्त/सहायक) requirements that banks have traditionally insisted upon for creditworthiness. Hence the need for PSBs to gainfully leverage unstructured(असंरचित) data such as prior transaction details and data from the goods and services tax platform to better gauge credit risks, and skirt around constraints(दबाव/बाध्यताएं)like lack of bankability in SMEs segment.PSBs need to make bold moves and initiate(आरंभ करना)major transformations in operations and oversight to build world-beating businesses and scale up, going forward. They need operational autonomy, and that is constrained by ownership structure.

Important Vocabulary

1.Innovation(नवीनता/नई पद्धति))
Synonyms: modernization, addition, alteration, contraption, departure
Antonyms: stagnation, custom, habit, old, old hat

2.Deserting(छोड़ देना/हट जाना)
Synonyms: betray, bolt, depart, escape, flee
Antonyms: come, continue, remain, stay, wait

3.Constraints(दबाव/बाध्यताएं)
Synonyms: pressure, restraint, coercion,compulsion, driving
Antonyms: deterrent, discouragement, freedom, hindrance, liberty

4.Collateral(अतिरिक्त/सहायक
Synonyms: ancillary, accessory, adjuvant, attendant, auxilia
Antonyms: chief, different, dissimilar, important, independent