The EASE (Enhanced Access and Service Excellence) is a significant reform agenda for public sector banks that intends to improve banking. Ease 2.0 Banking Reforms Index was introduced in 2018 as a joint effort by the PSBs and the government.
Authored by Boston Consulting Group, a US-based management consulting firm, the agenda was commissioned through the Association of Indian Banks.
Ease 2.0 Banking Reforms Index is created to measure the performance of banks on more than 120 metrics.
Significance of Ease 2.0 Banking Reforms Index
The index follows a transparent scoring system to help banks identify their strengths and areas of improvement. It aims to encourage healthy competition among the Public Sector Banks to drive change.
The report highlighted a decent improvement in the performance of banks in terms of non-performance assets. EASE 2.0 banking reforms index is an agenda built on the base of EASE and the report on the performance was released in 2020.
Facts About Ease 2.0 Banking Reforms Index
EASE 2.0 Banking Reforms Index is the second edition of the EASE program introduced to take the reforms and their progress further.
Ease 2.0 Banking Reforms Index, the government had proposed a focus on liquidity in the public sector banks.
Ease 2.0 Banking Reforms Index included new action points across 6 themes in an attempt to strengthen systems and processes, make the reforms journey irreversible and get the desired outcomes.\
Ease 2.0 Banking Reforms Index Themes
Here are the themes of the EASE 2.0 Banking Reforms Index:
- Credit Off-take
- Responsible Banking
- HR and Governance
- Customer Responsiveness
- Financial Inclusion and Digitalization
- PSBs as UdyamiMitra
The overall score of the public sector banks was noted to increase by 37 per cent between March 19 and 20, showing an overall improvement. The average EASE 2.0 Banking Reforms Index score improved from 49.2 to 67.4. The State Bank of India, Bank of Baroda, and Oriental Bank of Commerce were the top performers and were felicitated. The best improvers in the report were the Corporation Bank, Central Bank of India, and the Bank of Maharashtra.
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Improvements In The Ease 2.0 Banking Reforms Index
Some of the major improvements were highlighted by the EASE 2.0 across areas. Up to 50 per cent of financial transactions were recorded to be done through digital channels in the period. The turnaround time for loans was reduced to 10 days and an increase in the number of customer service centres was noted.
To conclude, the Gross NPAs came down from 8.96 lakh crore in 2018 to 6.78 lakh crore in 2020. A decline in fraud was also seen, along with an improved quality of assets.
The index continues to drive reforms, creating effective benchmarks and core parameters for banks to target, all the while promoting healthy competition within the banking sector.
FAQs on Ease 2.0 Banking Reforms Index
Q.1 What is the EASE 2.0 Banking Reforms Index?
The Ease 2.0 Banking Reforms Index measures the performance of each PSB based on 120 key objectives and metrics, created in an effort to encourage healthy competition among the public sector banks.
The index has thus far helped achieve its key objectives, with banks witnessing broad-based improvements across parameters ever since its introduction.
Q.2 Which bank ranked first in the EASE 2.0 Banking Reforms Index?
The Bank of Baroda secured the top position on the Ease 2.0 Banking Reforms Index. It ranked first on two themes out of six.
Q.3 When was the EASE 3.0 launched, as a follow-up to the Ease 2.0 Banking Reforms Index?
The third edition of EASE was launched in 2020 aiming at improving the ease of banking through customer experiences, as a follow-up to the Ease 2.0 Banking Reforms Index.
Q.4 Who launched the EASE 4.0, following both the Ease 2.0 Banking Reforms Index?
The EASE 4.0 was launched by Finance Minister Nirmala Sitharaman in 2021, following both the Ease 2.0 Banking Reforms Index, and the EASE 3.0.