Enhanced Access Service Excellence (EASE 2.0) Banking Reforms Index - An Overview

EASE Agenda is aimed at institutionalizing CLEAN and SMART banking. EASE Reforms Agenda was authored by Boston Consulting Group and commissioned by Indian Banking Association (IBA). This article throws light on performance of various Public Sector Undertakings (PSB’s) on EASE 2.0 Index.

Aspiring civil servants need to stay updated with the latest development in the domain of Indian economy and it is an important component of the IAS Exam. 

1. Enhanced Access Service Excellence has 30 Action Points
2. EASE has 6 themes.
3. EASE Agenda is aimed at institutionalizing clean and smart banking. 
4. EASE was launched in January 2018. 
5. EASE 1.0 was the foundation and EASE 2.0 banking reforms index was based on the foundation put in place by EASE 1.0.
6. The Index measures the performance of each PSB on 120+objective metrics
7. The scoring methodology used is completely transparent. This enables banks to identify areas of improvements as well as know their strengths.
8. This index is to encourage banks to learn from each other.
9. One of the objectives of EASE index is to drive healthy competition among Public Sector Banks (PSB’s).

Enhanced Access Service Excellence (EASE 2.0) – 6 Themes

1. Responsible Banking
2. Customer Responsiveness
3. Credit Off-take
4. UdyamiMitra for Micro, Small and Medium Enterprises (MSME’s)
5.  Deepening FI and Digitalisation
6. Governance and HR

Top 3 Banks in Ease 2.0 Index (Overall)

1. Bank of Baroda
2. State Bank of India (SBI)
3. Oriental Bank of Commerce

Top 3 Banks in Ease 2.0 Index: Theme 1 – Responsible Banking

1. Bank of Baroda
2. State Bank of India (SBI)
3. Punjab National Bank

Top 3 Banks in Ease 2.0 Index: Theme 2 – Customer Responsiveness

1. State Bank of India (SBI)
2. Oriental Bank of Commerce
3. Bank of Baroda

Top 3 Banks in Ease 2.0 Index: Theme 3 – Credit Off-take

1. Oriental Bank of Commerce
2. Union Bank of India
3. State Bank of India

Top 3 Banks in Ease 2.0 Index: Theme 4 – UdyamiMitra for Micro, Small and Medium Enterprises (MSME’s)

1. Oriental Bank of Commerce
2. State Bank of India (SBI)
3. Union Bank of India

Top 3 Banks in Ease 2.0 Index: Theme 5 – Deepening FI and Digitalisation

1. Bank of Baroda
2. Canara Bank
3. Punjab National Bank

Top 3 Banks in Ease 2.0 Index: Theme 6 – Governance and HR

1. State Bank of India
2. Bank of Baroda
3. Punjab National Bank

Reforms from March 2018 to March 2020 – Major Achievements

1. 23 crore basic savings account customers received RuPay credit cards from Public Sector Banks.
2. There was reduction in complaint redressal average turnaround time. It was reduced to 5 days from 9 days.
3. There was reduction in retail loans turnaround time to average of 10 days from approximately average of 30 days. 
4. Non-banking financial products were cross-sold thus making sure that customers had a greater range of financial products to choose from.
5. Call centre services are now available in 13 regional languages.
6. There are approximately 4 crore active customers on internet banking and mobile banking.
7. Financial transactions increased by 140% through mobile and internet banking.
8. 50% of the financial transactions were through digital channels.
9. Early, time-bound action in stressed accounts have been enabled since most of the Public Sector Banks have deployed IT-based EWS systems.
10. Slippage into NPA has reduced from 3.90 lakh crore in 12-months ending March-18 to 1.45 lakh crore in 11-months ending February-20.
11. OTS, e-DRT are some of the online digital platforms adopted by Public Sector Banks (PSB’s).
12. Dedicated IT systems are now used to track 88% of one-time settlement (OTS) cases.
13. Sourcing of MSME and retail loans has increased nearly 5 times to 8.3 lakhs from 1.5 lakhs. The marketing tie-ups and dedicated salesforce has contributed to this rise.

Governance Reforms – Introduced by the Government

1. Board committees system were made stronger
2. Executive Director strength has been increased in the larger Public Sector Banks.
3. In larger PSBs, Boards are empowered to introduce CGM level for increased business.
4. Selection of top bank management through Banks Board Bureau
5. Bank Boards were empowered.
6. Non-executive chairpersons were introduced.

EASE Reforms journey – Improvement in Financial Health of PSB’s

PSBs have returned to profitability due to the reforms.

1. Gross NPAs reduced to ₹6.78 lakh crore in March-2020 from ₹8.96 lakh crore in March-2018
2. NPA ratio reduced to 3.75% (Mar, 2020) from 7.97% (Mar, 2018).
3. Provision coverage ratio is at 80.9%, highest in 8 years.
4. Number of PSBs under PCA down to three.
5. In FY19-FY20, the recovery stood at ₹2.27 lakh crore. It was mainly driven by stressed account management verticals in PSB’s.

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