Soon, PSU banks will have staff conversing with customers in local languages

Furthering the banking sector reforms, the government may make it mandatory for the public sector bank branches to have at least one staff member speak the local language of the region where the branch is situated.

The move is aimed at having strong branch banking in the country for direct connection with customers, better disbursement of loans to individuals and sectors in need and also for a better implementation of the government schemes at the grass-root level.

Finance Minister Nirmala Sitharaman may also request Indian Bank Association to conduct an exercise to train bank staff at regional to have branch level customer connect.

Of late, loan disbursal by banks has been too slow. The incremental growth in bank credit, at present, is not even half of their deposit of Rs 7.50 lakh crore, according to the Reserve Bank of India data.

Among other things, banks are not lending to projects due to fear of the loan turning bad. The branch banking can encourage the geographical spread of risks, under which losses suffered by one branch can be offset by the profits of the other, said an official closely involved with the next generation banking reforms.

Sitharaman too has ensured that she would travel to various districts across the country and try to visit maximum bank branches next month when she would meet the branch-level staff and try to understand their problems coming in the way of dealing with their clients.

“This will help banks achieve their larger agenda,” she said after a meeting of PSU lenders, where she assessed the performance of MSME lending and how well have they been communicating to their customers about the Vivad se Vishwas' scheme proposed in the union budget earlier this month.

Customers expect a personal touch from bank branch staff, the finance minister is understood to have told the PSU bankers, asking them to work at branch-level with an aim to have direct connections with customers.

Sitharaman said that Indian Banks' Association should conduct an exercise for bank branches to inform them about government schemes as many bank branch staff do not even have information on government schemes.