Core banking

With reference to “Exit non-core biz to help conserve capital, FinMin tells banks’, (Business Line, December 24), it is heartening that, even though belated, the Ministry has called upon PSBs to concentrate on core banking businesses and come out of non-core functions. Of late, banks are engaged in ventures such as mutual funds, insurance, investment, equity broking, pension fund management, and so on, in partnership with private and foreign companies. Bank customers are often lured into these schemes, without being educated about the risks involved. Cash incentives, foreign tours, promotions and pressure from higher-ups force bank officials to sell the non-bank products to the customers. In many cases, customers have lost money. Banks reputation is at risk. Conserving capital without allowing leakage through these non-core banking operations will benefit the PSBs and its customers.

- K. S. Krishna, Kochi (HBL)