{"id":416,"date":"2020-07-04T11:22:08","date_gmt":"2020-07-04T11:22:08","guid":{"rendered":"https:\/\/www.competitionreview.in\/blogs\/?p=416"},"modified":"2020-07-04T11:22:08","modified_gmt":"2020-07-04T11:22:08","slug":"does-our-banking-system-need-an-overhaul","status":"publish","type":"post","link":"https:\/\/www.competitionreview.in\/blogs\/2020\/07\/04\/does-our-banking-system-need-an-overhaul\/","title":{"rendered":"DOES OUR BANKING SYSTEM NEED AN OVERHAUL?"},"content":{"rendered":"\n

\u201cWhatever the problem is, the answer is not in the fridge\u201d.<\/em><\/h3>\n\n\n\n

\u2014Anonymous<\/h3>\n\n\n\n

Our banking system, after being established in\nthe later part of the 18th century, has seen some major changes that have\ndriven a great deal of success into the system. The working of the banking\nsystem has constantly been subject to review and incorporation of new ideals\nsuch as in the banking codes and standards and the banking technology. The\ncontemplative changes in the system, when thinking through the prism are\ntraditionalistic, for example the exchequer funds supplied to the Imperial Bank\nof India, before it reformed into the State Bank of India, had enabled the\nIndian government to regain authority of its assets for the periods of\ninflation that persisted during the British Raj. Similarly, the changes that\neffected after Independence such as the Nationalisation of 91 percent of the\nbanking on the principles of the government meetings have directly impacted the\ncollaborative upliftment of the economy and the dignity of the people. <\/p>\n\n\n\n

The changes that have taken place recently are\nmore to do it with banking technology. With the advent of automated teller\nmachines and their data identity schemes, there is a new found liberalisation\nin the system of banking. The ability to push the envelope in accommodating new\ntechnology is limitless. From the logistic connectivity of internet banking to\nthe personalised customer awareness proficiency instituted by machine learning,\nbanking technology has made the hassle of banking activity a gloom of the past.\n<\/p>\n\n\n\n

The biggest fix the current banking system needs\nis a channel to resolve all the unaccounted pools of money and the\nNon-Performing Assets a.k.a. Stressed Assets. The overall burden in these\nassets is approximately 8.41 lakh crore in December 2017. The sheer magnitude\nof this liability has made it impossible for the banks to turn over profits and\nin turn invest in sophisticated standards and technology. <\/p>\n\n\n\n

There are some laudable steps that the\ngovernment has taken to curb this financial massacre, namely the demonetisation\nof the currency which has enabled the accounting of previously unauthorised\nfunds that made their rounds around the system. The Finance Minister has termed\nthe \u2018tailwind\u2019 effect of the demonetisation movement which has steered clear\nthe economy from black money constituency, corruption, terrorism, illicit drug\ntrafficking and many other social evils that plagued the society and rested on\nthe assurance of the unaccounted billions in currency. <\/p>\n\n\n\n

The other big change that has done greater good\nfor the banking system is the introduction of the GST. It has revolutionised\nthe standardised system of taxation by being more realistic in its approach of\nbilling and cost accumulation, the result of which is seen in the activity of\nhigher rates of collateral in the company-consumer supply chain relationship to\nensure efficiency in returns on the capital. <\/p>\n\n\n\n

The problems that are still prevalent are many\nand on close introspection it can be observed that it grows at exponential\nrates, the problems arise first with the staff and the level of trained\nofficers in the banks. The average age of banking professionals is limited to\nthirty-five during their hiring process. This means that experienced candidates\nwith a more in-depth understanding of the industry miss out on the chance to\nhelp the banking system grow in their services. I believe that one way of\nmaking the banking system more viable in terms of a more consumer friendly\nwork-force is to relax the age-limit in the hiring of new officers. We should\nkeep in mind that age does not always determine acumen. Secondly, the banks\nhave to add more credit to the lesser privileged parts of the society so that\nthey may experience growth and add the element of compassion to the system of\nbanking. Microfinance, interest-free loans and barter conundrums are a\nmagnificent way to reach out and improve the health of an economically sick\nsociety. Thirdly, the government can institute a manifold stream of\ncommercial  banks dedicated to attending\nto each and every customer based on their income and consumption. This would be\nsimilar to taxation rates that are imposed on different classes of people,\nbased on their vocation, salary amount, age, job type, etc. Why not have a\nbanking system that divides its banks to offer accounts solely to those under\ntheir set principles, so they may be able to focus on giving a higher leverage\nin the privileges that are present for those in the respective banks. This\nwould mean greater returns for the consumer on their investment, more\npersonalised banking solutions, greater transparency and security in the transactions.  <\/p>\n\n\n\n

The incorporation of the above changes to\noverhaul the present system would mean that a complete revision in the codes\nand standards of the banking system is set into motion, only then would there\nbe a brighter future for the system of banking in our country. It is imperative\nto remember that change is always good but never easy, the steps needed to do\nthese changes in the banking codes and standards would take years of careful\nreiteration of the whole system to actualise. <\/p>\n\n\n\n

The other area of banking where a mega-change\ncan be instituted is the technology sector. The banking system has scope for a\nwide range of advancements that are on the cusp of being accommodated. The\ndesign of data and identity related software has grown higher and higher, making\nit possible to access the secure channel banking systems through biometrics\nright at the door of the banks. <\/p>\n\n\n\n

The great technological revolution influenced by\nthe cloud computing measures has made working with the bank a delight and the\nharvest of the technological advancement are yet to bear fruit. Some predict\nthat within the next fifty years smart robots would be our personal financial\nadvisors and take care of our accounts with exhaustive intelligence and human\nemotion. There are also predictive algorithms that enable us to have the best\nstocks in our hands and safety, which used to be a concern before, has now\nbecome nothing with the high-level of network administrators that control the\nchannels of the transactions. \n\nWith all these wonderful amenities to look forward to, the future looks\nvery bright for the banking system in India and also the world. We must\nremember that the most important part of banking are the ethical principles of\nthe system, as the late US President Dwight David Eisenhower said, \u201cA people\nthat values its privileges above its principles soon loses both\u201d. As we as a\nnation move towards greener pastures in the banking system let us continually\nremember to trust and obey the high standards of ethics that ensure wholesome\ngrowth of the economy. \n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cWhatever the problem is, the answer is not in the fridge\u201d. \u2014Anonymous 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 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/posts\/416"}],"collection":[{"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/comments?post=416"}],"version-history":[{"count":1,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/posts\/416\/revisions"}],"predecessor-version":[{"id":417,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/posts\/416\/revisions\/417"}],"wp:attachment":[{"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/media?parent=416"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/categories?post=416"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/tags?post=416"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}