“Whatever the problem is, the answer is not in the fridge”.
—Anonymous
Our banking system, after being established in the later part of the 18th century, has seen some major changes that have driven a great deal of success into the system. The working of the banking system has constantly been subject to review and incorporation of new ideals such as in the banking codes and standards and the banking technology. The contemplative changes in the system, when thinking through the prism are traditionalistic, for example the exchequer funds supplied to the Imperial Bank of India, before it reformed into the State Bank of India, had enabled the Indian government to regain authority of its assets for the periods of inflation that persisted during the British Raj. Similarly, the changes that effected after Independence such as the Nationalisation of 91 percent of the banking on the principles of the government meetings have directly impacted the collaborative upliftment of the economy and the dignity of the people.
The changes that have taken place recently are more to do it with banking technology. With the advent of automated teller machines and their data identity schemes, there is a new found liberalisation in the system of banking. The ability to push the envelope in accommodating new technology is limitless. From the logistic connectivity of internet banking to the personalised customer awareness proficiency instituted by machine learning, banking technology has made the hassle of banking activity a gloom of the past.
The biggest fix the current banking system needs is a channel to resolve all the unaccounted pools of money and the Non-Performing Assets a.k.a. Stressed Assets. The overall burden in these assets is approximately 8.41 lakh crore in December 2017. The sheer magnitude of this liability has made it impossible for the banks to turn over profits and in turn invest in sophisticated standards and technology.
There are some laudable steps that the government has taken to curb this financial massacre, namely the demonetisation of the currency which has enabled the accounting of previously unauthorised funds that made their rounds around the system. The Finance Minister has termed the ‘tailwind’ effect of the demonetisation movement which has steered clear the economy from black money constituency, corruption, terrorism, illicit drug trafficking and many other social evils that plagued the society and rested on the assurance of the unaccounted billions in currency.
The other big change that has done greater good for the banking system is the introduction of the GST. It has revolutionised the standardised system of taxation by being more realistic in its approach of billing and cost accumulation, the result of which is seen in the activity of higher rates of collateral in the company-consumer supply chain relationship to ensure efficiency in returns on the capital.
The problems that are still prevalent are many and on close introspection it can be observed that it grows at exponential rates, the problems arise first with the staff and the level of trained officers in the banks. The average age of banking professionals is limited to thirty-five during their hiring process. This means that experienced candidates with a more in-depth understanding of the industry miss out on the chance to help the banking system grow in their services. I believe that one way of making the banking system more viable in terms of a more consumer friendly work-force is to relax the age-limit in the hiring of new officers. We should keep in mind that age does not always determine acumen. Secondly, the banks have to add more credit to the lesser privileged parts of the society so that they may experience growth and add the element of compassion to the system of banking. Microfinance, interest-free loans and barter conundrums are a magnificent way to reach out and improve the health of an economically sick society. Thirdly, the government can institute a manifold stream of commercial banks dedicated to attending to each and every customer based on their income and consumption. This would be similar to taxation rates that are imposed on different classes of people, based on their vocation, salary amount, age, job type, etc. Why not have a banking system that divides its banks to offer accounts solely to those under their set principles, so they may be able to focus on giving a higher leverage in the privileges that are present for those in the respective banks. This would mean greater returns for the consumer on their investment, more personalised banking solutions, greater transparency and security in the transactions.
The incorporation of the above changes to overhaul the present system would mean that a complete revision in the codes and standards of the banking system is set into motion, only then would there be a brighter future for the system of banking in our country. It is imperative to remember that change is always good but never easy, the steps needed to do these changes in the banking codes and standards would take years of careful reiteration of the whole system to actualise.
The other area of banking where a mega-change can be instituted is the technology sector. The banking system has scope for a wide range of advancements that are on the cusp of being accommodated. The design of data and identity related software has grown higher and higher, making it possible to access the secure channel banking systems through biometrics right at the door of the banks.
The great technological revolution influenced by the cloud computing measures has made working with the bank a delight and the harvest of the technological advancement are yet to bear fruit. Some predict that within the next fifty years smart robots would be our personal financial advisors and take care of our accounts with exhaustive intelligence and human emotion. There are also predictive algorithms that enable us to have the best stocks in our hands and safety, which used to be a concern before, has now become nothing with the high-level of network administrators that control the channels of the transactions. With all these wonderful amenities to look forward to, the future looks very bright for the banking system in India and also the world. We must remember that the most important part of banking are the ethical principles of the system, as the late US President Dwight David Eisenhower said, “A people that values its privileges above its principles soon loses both”. As we as a nation move towards greener pastures in the banking system let us continually remember to trust and obey the high standards of ethics that ensure wholesome growth of the economy.