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EASE 4.0 Reforms: Enhanced Access and Service Excellence 4.0

Hon. FM Nirmala Sitaraman presented the EASE 4.0 reforms along with felicitating PSB’s for their exceptional performance under EASE 3.0. Some of the banks that were felicitated are - State Bank of India, Bank of Baroda, and Union Bank of India. The EASE 3.0 was a success as the PSB’s reported healthy profits. These banks reported a profit of INR 31,817 crore in FY21 as compared to a loss of INR 26,016 crore in FY20.

Ease 4.0 is a reform for the Public Sector Banks to ensure smart banking. It was presented by the finance minister to be implemented by the IBA. The key issues touched upon in the EASE 4.0 reforms are co-lending with non-banking firms, digital, agriculture financing, and technological resilience for 24x7 banking. A huge focus has been given to data analytics, automation, and digitization.

Ease 4.0 is a continuation and further improvement of the Ease 3.0 initiative.

The key aspects under EASE 4.0 are highlighted as under-

Digital Lending

  • There is an aim to promote and introduce analytics-based system which would be used in the fields of pre-approved loans, MSME loans and EMI offers.
  • The new initiatives include Dial-a-loan initiative for doorstep loan facilitation. Under dial-a-loan, the govt has tried to improve the loan initiation process using simplification, SOP based action steps, and ensuring availability of on-site product advice.
  • Credit@click is another initiative used for end-to-end retail and MSME lending. The improvements that have been made aims to ensure customized loan terms, interest rates and processing charges based on behavior of customers and information from third party sources
  • There is also a focus on cloud-based IT systems and improved cyber resilience. There would be a fast-track implementation of cybersecurity measures.

Mobile/ Internet Banking and Customer Service

  • Focus has been laid on deeper penetration of mobile and internet banking and automation of all banking processes.
  • EASE 4.0 sets the agenda and roadmap to transform all PSBs into digital-attacker banks working hand-in-hand with key constituents of the financial services ecosystem to offer industry-best customer experience.
  • The new reforms aim to establish a call center-based retail and MSME customer outreach in regional languages and subject to customer preferences.
  • There is also an aim to improve the design and performance of the mobile banking app.

Date Enabled Agricultural Financing

  • Dial-a-Loan feature will also be used for agricultural lending.
  • There are plans to automate the processing and sanctioning of agricultural loans based on field visits, borrower interaction, and risk assessment in states with digitized land records.

Collaborating with Financial Ecosystem

  • This will help in ensuring increased digital payments in semi-urban and rural areas.
  • Improvement in delivery of doorstep banking services and initiate such services via mobile apps and calls.
  • There is a plan to have API-based data exchange and IT system linkage between banks and NBFC’s.

The EASE Index will measure the performance of each PSB on 135+ objective metrics across five themes. It will provide all PSB’s a comparative evaluation showing where banks stand on the basis of the benchmarks and among their peers on the reforms agenda. The Index will follow a fully transparent scoring methodology, which will enable banks to identify precisely their strengths as well as areas for improvement. The index will be similar as what was adopted under EASE 3.0.