Gyan Sangam ripple-possible cut in the Credit Card/Debit transaction costs

            The official release of the Bankers Presentation to Shri Narendra Modi is still awaited. However news of the various discussions/thoughts/ideas is slowly trickling down.

            One of the main focus areas was on Cashless transactions. PM Modi has said that  banks in India should compete for achieving maximum cashless transactions, as this would be the "best solution" to the problem of black money.   

            Cashless transactions though on the rise are not popular amongst middle and lower middle class. This applies both to sellers as well as buyers.

            In majority of the medium size business establishments, credit/debit card transactions attract an additional cost of 1.8% to 2.00% of the bill amount.

            The buyers are advised the nearest ATM location, wherein cash can be withdrawn and bill settled.

            Online payment of Utility bills or other travel related transactions attract a convenience fee.

            Such additional costs discourage Cashless transaction in our country and increase cash transactions.

            In the coming months as the Gyan Sangam ideas are put into action, it is expected that a detailed study will be done on ways and means to reduce the Credit Card/Debit Card Transactions costs.

           

            

Gyan Sangam – The Beginning and The End

            The physical 2 days Banking Retreat @ Gyan Sangam NIBM Pune is over. 

            A beginning has been made to revitalize the Public Sector Banks morale.

            The issues are complex and there are no simple answers.

Gyan Sangam is expected to be Annual Retreat.

There is a give and take policy at the Gyan Sangam deliberations.

A dedicated Gyan Sangam website would enable the general public also to participate in this change.

At the end of Gyan Sangam 2015, bankers collectively resolved to improve on five points.

At the same time they demanded some commitment from the government to improve the state of banking in the country.

State Bank of India Chairperson Arundhati Bhattacharya made the presentation to Prime Minister Sri Narendra Modi on behalf of all Bankers.

Quote "We as a group (all public sector banks) have decided to adopt five major resolutions."Unquote

The five points include:

01)  a decision to re-orient the portfolios of small public sector banks to focus on specific and differentiated niches,

02)build people capacities,

03)use of more technology (especially in the top 30 processes),

04)strengthen risk management practises

05) strengthen the partner channels such as business correspondents.

Financial Services Secretary, Hasmukh Adhia, said, "This is something banks have said they will work upon...we have specified no timelines for any of them."

 At the same time, bankers have also asked the government for some commitment which Adhia said will be looked into "positively."

The bankers have requested the government to move from a state-owned structure to a state-linked structure, as recommended by the P.J.Nayak committee report. This would entail, among other things, setting up of a banking bureau comprising of professionals and eminent bankers to appoint and empower individual bank boards.

Other commitments requested by the banks, of the government include:

a)     fully empower banks on human resource related decisions,

b)   creating the right environment for minimal interference,

c)    strengthening the legal framework for recovery of loans,

d)    strengthening and simplify processes for credit insurance,

e)    eliminate debt waivers and

f)    do away with interest rate caps,

g)    and finally creating the enabling infrastructure for digital banking.

Media was not allowed to cover the PM's address. In the coming days, more details are expected to be released to the media.