Public sector banks (PSBs) will launch financial schemes specifically for startup entrepreneurs and gig economy workers, in addition to streamlining credit assessment procedures to make banking more resilient. The move is expected to offer much-needed financial relief to entrepreneurs who find it difficult to raise funds.

The Department of Financial Services in the Finance Ministry has ordered banks to frame strategies that enable emerging segments like startups and gig workers, sources with knowledge of the situation said. The order is part of the soon-to-be-released EASE 8.0 (Enhanced Access and Service Excellence) reforms agenda.

The new program, known as EASE  Rise (Risk & Resilience, Innovation, Social Economic Impact, and Excellence), will be rolled out in the subsequent fiscal year. It will target risk strengthening assessment, credit resilience, management of non-performing assets (NPAs), financial inclusion, customer experience development, digitalization via business process re-engineering, and the use of artificial intelligence.

At EASE  Rise, PSBs will upgrade their IT infrastructure, improve data quality and privacy, and implement lean banking models by means of branch and cost optimization approaches. They will set up incubator support programs to enable the founders of startups to expand their businesses by linking them to incubators.

In order to further business process re-engineering, banks will need to digitize internal and external processes next year. Moreover, they will drive digital banking solutions such as mobile banking and frontline digital assurance technologies.

Although the Finance Ministry has not yet replied to questions regarding the initiative, experts see the ongoing transformation of PSBs under the EASE model. Vivek Iyer, Grant Thornton Bharat Partner and Financial Services Risk Leader, pointed out that considerable progress has been achieved in safe lending and credit risk management but there remains a need to improve governance, risk culture, compliance, and audit infrastructure. He also highlighted the importance of addressing third party risk management with a holistic approach and hyper-personalization through data-driven banking.

Evolution of the EASE Framework

Initiated in FY19, the EASE reforms were designed to make PSBs more responsible and responsive. Each phase that followed brought strategic enhancements:

EASE 2.0 (FY20): Clean and smart banking.

EASE 3.0 (FY21): Robust technology platforms for smart tech banking.

EASE 4.0 - 6.0 (FY22-FY24): More collaborative, data-driven, and inclusive banking.

EASE 7.0 (FY25): Customer delight and resilient banking.

Yet, professionals believe that banks must focus more on data quality, governance, and transparency, coupled with formal benchmarking and mentoring across PSBs of various sizes.

These reforms, led by the Indian Banks Association's EASE Steering Committee, aim to transform PSBs in an integrated manner with best practices to cater to changing banking needs and enhance customer experience.