FM launches EASE 4.0, reviews performance of PSBs

Context:

Finance Minister Nirmala Sitharaman undertook the annual performance review of the public sector banks (PSBs) and launched the EASE 4.0 or Enhanced Access and Service Excellence – a common reform agenda for PSBs aimed at institutionalising clean and smart banking.

Relevance:

GS-III: Indian Economy (Banking Sector)

Dimensions of the Article:

1. What is Enhanced Access and Service Excellence (EASE)?
2. Editions of EASE
3. About Ease 4.0

What is Enhanced Access and Service Excellence (EASE)?

• First launched in January 2018 jointly by the government and PSBs, Enhanced Access and Service Excellence aim at institutionalizing clean and smart banking. It was commissioned through Indian Banks’ Association and authored by the Boston Consulting Group.
• EASE is based on the recommendations made at the PSB Manthan held in November 2017.
• EASE Reforms Index: The Index measures performance of each PSB on 120+ objective metrics. The goal is to continue driving change by encouraging healthy competition among PSBs.
• PSBs have done well and come out of Prompt Corrective Action (PCA) despite service extended during the pandemic. PCA is a framework under which banks with weak financial metrics are put under watch by the RBI.
• PSBs have recorded phenomenal growth over four quarters since the launch of EASE 3.0 Reforms Agenda in February 2020.

Editions of EASE

1. EASE 1.0: The report manifested notable improvement in PSB performance in the resolution of Non Performing Assets (NPAs) transparently.
2. EASE 2.0: Build on the foundations of EASE 1.0, it introduced new action points and focussed on six themes of customer responsiveness– responsible banking, credit offtake, PSBs as Udyami Mitra, deepening financial inclusion and digitalisation, and developing personnel for brand PSB.
3. EASE 3.0: Launched in February 2020, it focussed on enhancing the ease of banking in all customer experiences, using technology, alternate data and analytics. 

About Ease 4.0

• EASE 4.0 commits PSBs to tech-enabled, simplified and collaborative banking to further the agenda of customer-centric digital transformation.
• Major Themes proposed under EASE 4.0:
  1. 24×7 Banking: Under EASE 4.0, the theme of new-age 24×7 banking with resilient technology has been introduced to ensure uninterrupted availability of banking services.
  2. Focus on North-East: Banks have also been asked to come up with specific schemes for the North-East.
  3. Bad Bank: The proposed bad bank is very close to getting a licence.
  4. Raising Funds Outside the Banking Sector: With changed times, now industries have the option of raising funds even from outside the banking sector. 
  5. Leveraging Fintech Sector: Fintech (Financial Technology), one such sector that can provide technological help to banks as well as can benefit from help from the banking sector.
  6. Export Promotion: Banks will be urged to work with state governments to push the ‘one district, one export’ agenda.

-Source: The Hindu