Don't rely much on rating agencies, go for personal connect at branch level: Sitharaman

Don't rely too much on the reports of rating agencies, the finance minister told a gathering of top officials of public sector banks who were in Delhi to attend the release of an appraisal report and future road map prepared by the Indian Bankers Association writes Senior Journalist Krishnanand Tripathi.

Hyderabad:Finance minister Nirmala Sitharaman on Wednesday lamented the loss of personal connection between the customers and bank staff at the branch level and over-reliance on the report of rating agencies in the decision making in the banking sector.

Don't rely too much on the reports of rating agencies, the finance minister told a gathering of top officials of public sector banks who were in Delhi to attend the release of an appraisal report and future road map prepared by the Indian Bankers Association.

‌Finance minister, whose biggest challenge is to kick-start a slowing economy that slowed down to a six-year low at the start of Prime Minister Narendra Modi's second term, is grappling with the low credit availability to MSME, retail and housing sectors, that are considered the primary reason for pulling down the growth.‌

“We have all the credit rating agencies, agencies which rate different banking functions and therefore talk about the customer and his worthiness. But these are not pieces of advice, they are only an indicator, what the customer is,” the finance minister told the top officials of public sector banks.

“Was there ever a directive from either the Reserve Bank or from the Indian Bankers Association that said that you will blindly follow the rating agencies figures or numbers given to you know?” finance minister Nirmala Sitharaman asked the bankers.

Improve relations with customers at Branch level

Finance minister Nirmala Sitharam urged the bankers to be more accessible not only to their customers but to their junior staff as well. She said that the personal connection between the bank staff and local people was the USP of public sector banks as the staff knew most of the customers personally and also knew the difficulties faced by those customers.

“There was a level of connect with your own customers,” she told top officers of PSBs, adding that these factors influenced the decision-making process at the branch level and not the reports of rating agencies.

“Today the branch level Connect possibly is not as much as it was before,” she observed in the meeting.

“We want to use big data, we would want to use data analytics, we would definitely want to benefit from all this because it gives you the big advantage nationally to look at how we want to handle certain things but at the branch level, customers expect that little touch from you,” said the finance minister.

Nirmala Sitharaman also asked the banks to designate a particular day both at branch and circle levels to listen to the grievances of their customers.