Pune: Union finance minister Arun Jaitley on Saturday, said that state owned banks need to be given more autonomy and that there is a need for adopting a commercial mindset while dealing with the problems in the sector.

“There are unacceptable levels of NPAs (non performing assets) in some cases and the banks have to be given a sufficient amount of leeway to deal with commercial issues with a commercial mindset," Jaitley said, while talking to reporters on the sidelines of a bankers’ retreat organised at Pune.

Jaitley, who was present with Reserve Bank of India (RBI) Governor, Raghuram Rajan for a briefing on the developments at the retreat, also talked about bringing in the best talent available to improve their conditions.

The finance minister also reiterated that there is a need for banks to now infuse liquidity and finance infrastructure and manufacturing in a big way as the government is trying to move to a high economic growth scenario in the country.

“We know that this two day interaction with bankers, RBI, government of India and experts is going to pave a way for a new roadmap," he said.

The two day banker’s retreat, titled Gyan Sangam, is aimed at bringing together all stakeholders of the banking and insurance sector along with regulators and policy makers to strengthen the financial sector and bring in much awaited reforms.

Senior executives of nearly all commercial banks, insurance sector representatives, non-banking finance companies and financial sector experts have been divided in to six working groups discussing topics like technology, risk management, rethinking priority sector lending, universal financial inclusion, robust people motivation strategy and restructuring of public sector banks for better efficiency and governance.

According to Jayant Sinha, minister of finance for the state of Maharashtra, participants have been told to bring in innovative and bold suggestions through the presentations. A draft report on reform agenda base on these recommendations will be presented to Prime Minister Narendra Modi on Saturday evening, he added.

“We will receive these recommendations from the six working groups here and then as the government we will take a call on when it will be practical to implement them. The goal behind bringing everybody together here is to move to action as soon as possible," said Sinha, who was also present for the retreat.

In their presentation on leveraging technology and improving cost efficiency, bankers stated that within the next 12 months they would need to speed up the penetration of mobile banking among their customers.

The government on its part has been requested to complete its common know your customer (KYC) procedures for customers of the financial sector.

As part of the presentations, bankers also recommended that top 30 banks in India be completely digitized within a year, so as to leverage technology and provide better services to their customers.

To improve cost of efficiency and to encourage more electronic transactions, bankers have suggested that the government provide tax incentives on transactions over Rs20,000. Additionally, point of sale merchants will also be urged to reduce the 1.5% fee they charge for transactions.

Banks have also requested that the cyber crime cells in states across India be empowered to deal with fraudulent transactions.

On a slightly longer term basis, banks propose they will focus on big data and analytics to provide focused customer service. The bankers also suggested that the government strengthen its digital infrastructure between the next one to three years.

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