TECH TONIC
Use of cheque books and passbooks dropped as technology was the buzzword. ATMs came up at every corner and with electronic fund transfers, net banking and mobile banking branches wore a deserted look.
RETAIL BOOM
Home loans, a plethora of EMIs and a bunch of credit cards became part of every household. From a few million credit cards at the start of the decade, the number rose to nearly 30 million in 2007 before culling started. Similarly, the share of home loans in outstanding bank credit rose from 3.3 per cent in 2000 to nearly 13 per cent in 2007.
UNIVERSAL BANKS
ICICI merged into ICICI Bank, IDBI was converted into a bank, IIBI was wound up and IFCI is hunting for a viable business model. While development financial institutions died, every bank wanted to be a universal bank offering mutual funds, insurance policies, apart from banking services.
BASEL NORMS
Indian banks beefed up capital, introduced income recognition norms and stepped up risk management systems.
OVERSEAS PRESENCE
All large players started opening branches and subsidiaries abroad. The idea was to cater to the Indian companies that were venturing overseas and tap the resource pool of non-resident Indians.
BAD DEBT
With banks unable to act against defaulters, the government enacted a law — The Securitisation and and Reconstruction of Financial Assets and Enforcement of Security Interests (Sarfaesi) Act — that enabled lenders to reduce bad debt. Aided by asset reconstruction companies, the level of gross non-performing assets fell from 15.9 per cent of gross advances in March 1999 to 2.3 per cent in March 2009.
FINANCIAL INCLUSION
Forget rural branches. Bio-metric ATMs, hand-held machines and business correspondents are the new tools to reach the unbanked, not just in rural areas but also in Mumbai’s Dharavi.
RETURN OF THE PUBLIC SECTOR
Aided by the country’s largest VRS, recapitalisation and new products, the public sector emerged leaner, stronger and more nimble. The global financial crisis and the subsequent flight to safety meant the government-owned entities cornered nearly 74 per cent of the market by the end of June 2009, the highest in a decade.
LISTED BANKING ENTITIES
From 24 listed banks, with a market capitalisation of Rs 46,500 crore, at the end of 1999, there are now 41 such entities that are together worth Rs 590,700 crore.
BACK-TO-BASICS BANKING
Domestic banks are no longer investing in credit-linked notes and collateralised debt obligations — instruments that were unheard of in India till a few years ago. Unsecured loans are out and AAA companies and government securities are back.
