New Delhi: Service providers to public sector banks (PSBs), including vendors, law and consulting firms, and IT companies, may face challenges securing contracts from all PSBs if they underperform or delay projects of any one bank. The government has asked lenders to identify such firms and create a negative list.
“We want banks to ensure that these non performers do not get business from any other state-run financial institutions. We expect PSBs to share this information amongst themselves and take strict action against erring parties,” said an official requesting anonymity.
A senior bank executive confirmed the developments and said that the banks will hold internal discussions on the matter and that one of the suggestions is to develop a web portal where all PSBs can share feedback and also flag concerns, if any. “We are looking to set up a working group of five banks to study and submit a comprehensive framework, including a web portal where the performance of vendors can be uploaded and modified,” he said. Another bank executive said that before any such initiative is undertaken, there needs to be a more detailed review of the scope of the project and what information will be captured. “Will there be a threshold so that only strategic vendor data is captured? All such issues will be discussed before going ahead with this project,” he added.
Earlier this year, the finance ministry, after a review meeting to enhance the efficacy of DRTs, directed banks to conduct periodic reviews of the performance of empaneled advocates and rationalise the assignment of their cases, taking into account their performance. Banks were further directed to ensure the presence of their officers at all the hearings of their respective cases before judicial forums.
As per the latest data from the finance ministry, around 2.15 lakh cases are pending before DRTs till January 2024, of which 1.62 lakh are original applications (OAs) filed under Section 19 of the Recovery of Debts and Bankruptcy Act (RDB Act), 1993. The government has also asked PSBs to collaborate, scale up common utilities and initiatives, and start peer-to-peer collaboration by building and sharing technology, operations, and people capabilities.
Set up by state-run banks, PSB Alliance Pvt. Ltd. acts as an intermediary for all the PSBs and creates common applications or platforms.
The firm focuses on delivering financial and non-financial banking services to customers’ doorsteps.
