As per the RBI directive, the retail loans will set a new standard while getting influenced by few external rates that will supposedly bring new transparency to the system from April 2021.
2022 has been a hard nut to crack for the banking sector due to the deteriorating quality of assets.
Above that, there were uncountable changes and challenges like restriction on the use of Aadhaar cards for e-KYC by the Supreme Court, cryptocurrency ban by RBI and uncertain exit of execs various private leading banks that weighted the performance and governance issues.
Apart from these, major events like the merging proposal of 3 public sector banks by the central government and RBI’s decision to benchmark all retail loans, even the ones given to small industries, up to an external rate. Know how these things will challenge the fintech and banking sector in the year 2021!
- Retail loans will be more transparent!
As per experts, banks were not following the laid guidelines as critically as they must. However, RBI has announced that all the retail loans will run based on external rate, which is effective from April 2021; banks will now have to reduce their interest loans if the rates go down everywhere. This will bring more transparency to the overall system. Further details will be available in the 1st quarter of this year.
- e-KYC will be better than ever!
The traditional never-ending process of getting registered in the banks was somehow removed by the e-KYC process of the Aadhaar number. However, as it was banned on 1st September 2022, both the customers and banks faced the same earlier complications related to filling forms and never-ending paperwork. However, experts are hoping that this complication will go away in 2021. They are expecting that government will bring new measures for authentication of customers and their registration online with lesser charges, fees, time consumption and complications.
- The merging of 3 PSU banks will bring in something different!
In September 2022, the government laid down a proposal to link Vijaya Bank, Dena Bank and Bank of Baroda (all these are state-owned PSU banks). As this gets done in 2021, the customers will have to track the transformations in their deposit rates and current loan plans. As per the acquiring bank, changes will surely be there. Thus, it is good for the customers to know all details about chargeable and free services.
Also, don’t forget that your bank account number and related details like Indian Financial System Code (IFSC) code will supposedly change. So, make sure to update it as soon as the merger happens. And finally, the merger will affect all internet banking protocols too. So, if you can’t use your current ID and password anymore, don’t panic and update it as per the rules laid down by the merged entity.
The Managing Director of SVC Co-operative Bank, Mr Ajit Venugopalan, asked people to be alert while using their online credentials for internet banking. Always confirm before the login process and avoid phishing.
The plan of launching UPI upon Whatsapp will surely make it mainstream as small cities and people will get an opportunity to digitalize their transactions!