Fourteen major banks were nationalized in 1969, and more some were nationalized a few years later. Since then banks have come to play a major role in the socio-economic life of the country. They are no longer merely instruments for credit-mobilization and money-lending. They are no longer merely institutions for the benefits of a few individuals. They are now powerful instruments of economic growth and social justice. A Shri H. C. Sanker very pertinently remarked “banks have to act not only as purveyors of credit, but also as harbingers of social and economic development through a variety of enterprises, many of which may be tiny and yet capable of generating productive energies”.
The role of the banks has changed; still the quality of banking services in India remains poor. A bank transaction-is a time consuming affair, causing much harassment and irritation to the constituents. There are frequent exchanges of hot words with the concerned clerks, and instances are not lacking when even abuses and blows have been traded. To avoid such delays and frustrations, it is essential that the teller system be introduced in all major banks at the earliest. Computerization of banking service should also be done in the interest of efficiency and promptness. However, this will have to be done with due forethought and care as the employee’s unions are generally opposed to it.
Courteous, sincere and duty-conscious staff is also a must, if the banks are to play there due role in the life of the country. At present the staff, even in the major nationalized banks, is not only inefficient and rude, but is also lacking in sense of duty and decorum. Even during peak hours, when the rush is at its maximum, the concerned employees leave their seats to ‘take tea’ and then return at leisure. During all this time, the people wait and if some-one has the boldness to complain, he is rudely and his work is delayed further for one reason or the other. The officers remain helpless to remedy the situation. The employees’ unions are all powerful, and if there is any against the manager and other officers. Efficient, courteous and sincere staff is the crying need of the hour. This is essential to improve the quality of banking services in the country.
It is also essential that banks should mobilize maximum possible deposits, so that they may be more liberal in advancing loans. For mobilization of deposits, it is essential that people are made aware of the fact that it is in their interest to deposit money in the banks. The people, especially in rural areas, should be assured that the money deposited in banks is entirely safe and they can withdraw it at their sweet will. Even small investors should be tapped through such door-to-door approach.
People in general specially women, are of the view that it is more profitable to invest money in the purchase of gold. To mobilize deposits such attractive schemes as, “re-investment plan, recurring deposit scheme, retirement plan, permanent plan”, etc. should be promoted. Secondly, the small depositors should be given education in banking. They have to be assured that their money in the banks is as good as in their purse, that the process of withdrawal is not difficult and that there are a number of additional benefits, apart from the interest accruing from bank deposits. Such education to the people is very essential for the rapid mobilization of deposits.
It is only when maximum deposits are mobilized, that the banks would be able to liberalize their lending policy and play a creative role in national life. It is essential that loans are advanced to small entrepreneurs and the self-employed on easy liberal terms.
The criterion should not be the paying capacity of the borrower, but weather the loan so advanced is likely to help in increasing production. If it is so, loans should be advanced even if sometimes there is a default in the payment of due installments. Bank-managers should make judicious use of their discretionary powers in this connection.
Banking services should be extended to rural areas also. We are happy to note that during the last few years more and more banks have opened their branches in the villages. The establishment of the Rural Development. Bank is a step in the right direction. Still, much more remains to be done. The task of providing banking facilities to the rural folk should be taken up on a war footing. The many advantages of banking should be explained to the rural-dwellers who are ignorant and conservative. Deposits should be mobilized and loans should be advanced on liberal terms. This would enable the agriculturist to purchase good quality seeds, fertilizers, and scientific implements like tractors, thrashers etc. this would result in increased production. In this way, the Indian farmer would be freed from the clutches of the local money-lender and his traditional poverty would be gradually eradicated. India is on the march, far-reaching socio-economic changes are taking place, and Indian banks should come forward to play their due role in the process. But this can be possible only if the quality of banking services is considerably improved.