Good customer service is key to banks growth and stability: FM

“Good customer service is the heart of banking service delivery. Banking is predominately a customer oriented business and good customer service is the key to banks growth and stability,” finance minister Pranab Mukherjee said

Gurgaon: Terming human capital deficit as a major challenge to public sector banks, finance minister Pranab Mukherjee on Sunday day asked them to improve customer service to stay relevant in the competitive financial market, reports PTI.

“With enhanced competition amongst banks, customer service becomes the soul differentiating factor to be leveraged to stay relevant and to forge ahead in the business,” Mr Mukherjee said at the golden jubilee celebration of State Bank Staff College.

“Good customer service is the heart of banking service delivery. Banking is predominately a customer oriented business and good customer service is the key to banks growth and stability,” he said.

As customer awareness grows, the finance minister said banks would be required to gear up for providing more efficient and cost effective services leveraging the technological capabilities.

Indicating that the human capital deficit is one of the major challenges for the public sector banks, Mr Mukherjee said, “manpower policy planning and human resource development are among the measure key areas for our PSBs today.” 

A substantial part of the current work force in public sector banks (PSBs) had joined in the 1970s and is in the process of superannuating, he said.

“It is estimated that in the next few years 80% of the general managers, 65% of the deputy general managers, 58% of assistant general managers and 44% of chief managers would be retiring,” he said.

“To replace the existing workforce, which was basically trained in traditional banking, with personnel with specialised financial service delivery skills is both a challenge as well as an opportunity,” he added.

Mr Mukherjee said the government has recently requested the chiefs of the PSBs to prepare their respective human resource management plans, keeping in view the decisions taken on the recommendations of the Khandelwal Committee report on the HR issues.

“I would urge all the CMDs and their colleagues on the boards of the PSBs, to provide their undivided attention on human resource development matters as the subject has not received the focus it deserves at the board level,” he said.

This would enable the PSBs to emerge as strong and viable financial institutions, he said.

“I would like all PSBs including SBI to attach the highest priority to human resource development and feel confident that with a new approach to HRD, they would be able to live up to the expectations of the needs of our economy and be an important catalyst of the country’s progress and development,” he said.

The finance minister said a bank is only as good as its people, and therefore, the quality of its human capital would be the single most important defining factor in shaping its future.

“I would urge the management, executives and staff to be alive to these challenges of the future and successfully carry forward the wonderful legacy they have inherited,” he said.

Mr Mukherjee also stressed on the fact that the customer retention is going to be the key factor for the banks, going ahead.

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Food ministry issues export release for 86k tonne sugar

The food ministry has issued export release orders for 86,039 tonne as on 9th March. Sugar mills have been given 45 days from the notified day to apply for export release orders, which will be valid for 60 days

New Delhi: The food ministry has issued export order for more than 86,000 tonne sugar, out of the second tranche of 10 lakh tonne that the government allowed for overseas shipments in the 2011-12 marketing year, reports PTI.

Sugar mills cannot export the sweetener without the release order from the food ministry. The sugar marketing year runs from October to September.

On 7th February, the Empowered Group of Ministers (EGoM), headed by finance minister Pranab Mukherjee, had allowed exports of additional one million tonne of sugar.

The decision was notified on 24th February and 10 lakh tonne (LT) was allocated to the mills based on their average output over the last three years.

According to the latest data, the ministry has issued export release orders for 86,039 tonne as on 9th March.

Sugar mills have been given 45 days from the notified day to apply for export release orders, which will be valid for 60 days.

The EGoM had decided to allow the second tranche of sugar exports as the country’s output is estimated to outstrip demand in 2011-12.

In the 2010-11 marketing year, the government had allowed 26 LT of exports, out of which 15 LT was through OGL in three tranches.

Sugar production in India—the world’s second-largest producer and the biggest consumer—is estimated at 25-26 million tonne in this marketing year. The country's annual demand is pegged at 22 million tonne.

In the 2008-09 and 2009-10, sugar production was below domestic consumption at 14.53 million tonne and nearly 19 million tonne, respectively. The country had to import about 6 million tonne of sugar to meet the shortfall.

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SBI to consider fund raising through FPO, QIP next fiscal

“We should understand that government cannot keep on pumping in capital (in public sector banks) without any limit. So, we would explore the possibility of FPO or QIP next fiscal after due consultation with the government,” SBI chairman Pratip Chaudhuri said

Gurgaon: Sate Bank of India (SBI), the country’s largest lender, on Sunday said it would explore the possibility of raising capital through a public offer or from institutional investors next fiscal even as it is getting Rs7,900 crore support from the government by end of this month, reports PTI.

“In the next fiscal beginning April 2012, we would discuss with the government for dilution of its stake through a FPO (follow-on public offer) or QIP (qualified institutional placement),” SBI chairman Pratip Chaudhuri said here.

“We should understand that government cannot keep on pumping in capital (in public sector banks) without any limit. So, we would explore the possibility of FPO or QIP next fiscal after due consultation with the government,” he said.

For raising the Tier I capital of the bank, the government has agreed to infuse capital to the tune of Rs7,900 crore by 31 March, 2012.

Post capital infusion, the government holding in the bank would rise to 62%, from about 59% at present.

As per the existing regulation the government holding cannot come down below 51%.

So there is headroom for stake dilution of about 11% in the bank, he said, if the government permits, the bank may go in for raising capital.

Terming 0.75 percentage cut in Cash Reserve Ratio (CRR) a week ahead of the mid-quarterly review of monetary policy on 15th March as a ‘surprise,’ he said this would help easing liquidity pressure on the system.

“I don’t think that RBI would take further action the policy review (on 15th March),” he said.

The apex bank slashed CRR, the percentage of deposits that banks have to keep with the RBI, from 5.5% to 4.75% on 9th March. With this, the central bank infused Rs48,000 crore into the economy.

On the issue of fresh lending to Kingfisher Airlines, he said, “there is need for fresh capital. I think the management of the airline is alive to the issue and would make all effort to get fresh capital.” 

Asked if SBI participated in the recent ONGC share sale, Mr Chaudhuri said the bank did participate in the offer for sale. He, however, refused to divulge details of share purchase made by the bank.

Of the 42.04 crore shares auctioned earlier this month, state-owned insurance giant LIC picked up 37.71 crore shares in ONGC.

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