The Indian banking industry, along with showing good performance, is striving for better governance.
With
the intensification of the pace of ongoing economic
and financial sector reforms for more liberalization
and globalization of the Indian economy, the Indian
banking industry is undergoing a paradigm shift in scope,
content, structure, functions and governance. Their
very character, composition, contour and chemistry is
changing. The information and communication technology
revolution is radically and perceptibly changing the
operational environment of the banks.
Banking
sector is faced with multiple and concurrent challenges,
increased competition, rising customer expectations
and diminishing customer loyalty. In the complex and
fast changing scenario, the only sustainable competitive
advantage is to give the customers an optimum blend
of technology and personalized service. Banks are in
race with each other for adopting new Customer Relationship
Management (CRM) and Knowledge Management techniques.
They are introducing sophisticated e-banking facilities
to give the customer extra reach and convenience.
The
revival of the economy is slow and banks being flush
with funds are struggling to kick-start the economy
by increasing credit off take by reducing interest rates
and relaxing various terms and conditions etc. Most
of the scheduled commercial banks are carrying heavy
bag of NPAs, which has crossed Rs. 70,900 cr mark as
on March 31, 2002 with an increase of 11.34% over the
previous year. It is seriously impacting their profitability.
To accelerate the recovery effort, the banks have initiated
action under the new Act on Securitization and Reconstruction
of Financial Assets and Enforcement of Security Interest. |
