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PSBs To Push Co-Lending With NBFCs, Digital, Agri Financing Under Ease 4.0 Reform

Ease 4.0 reforms agenda for financial year 2021-22 is likely to be unveiled by Finance Minister Nirmala Sitharaman later this week

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Co-lending with non-banking firms, digital, agriculture financing, and technological resilience for 24x7 banking are expected to be part of Ease 4.0 Index, a reform agenda for 2021-22 for public sector banks, sources said.

Launched in January 2018, Enhanced Access and Service Excellence (Ease) is the common reform agenda for all public sector banks (PSBs) aimed at institutionalising clean and smart banking.

Ease 4.0 reforms agenda for financial year 2021-22 is likely to be unveiled by Finance Minister Nirmala Sitharaman later this week, sources said.

She is expected to declare the results of Ease 3.0 Index for 2020-21, they said, adding that PSBs would be rated on various indexes for the year.

Sources said, this year PSBs will focus on introducing and promoting new analytics-based offers to existing retail customers like pre-approved car loans, EMI offers on e-commerce purchases and also for existing MSME customers.

Such offers will be based on bank transactions, income tax and GST returns, transactions on e-commerce portals, and other operational data, they added.

As per the proposed reform agenda, banks will leverage partnerships with third parties, including agritech firms and strive to automate processing and sanction of agricultural loans based on field visit, borrower interaction, and risk assessment in states with digitised land records.

Under the co-lending model with non-banking finance companies, banks will take 80 per cent exposure, while NBFCs will provide customer service and grievance redressal.

The Finance Minister is scheduled to meet heads of PSBs on August 25 to review financial performance of the lenders and progress made by them to support the economy battered by COVID-19 pandemic.

Given the importance of the banking sector in generating demand and boosting consumption, sources said the meeting with MDs and CEOs of PSBs is considered important.

The Finance Minister is going to review progress made by banks to promote schemes including Emergency Credit Line Guarantee Scheme (ECLGS) and PM Street Vendor's AatmaNirbhar Nidhi (PM SVANidhi) unveiled by the government under series of stimulus packages since March last year.