19

The main benefit of digitisation in banking is to lower the cost of operation in banking. One must know how costly it is to run a brick and mortar branch. Its staff salary, electricity, office furniture and fixture, office rents and so on involve huge cost. Digitisation lowers these costs. It is also true that personal connection is important for banking and digitisation minimises it. It creates problems in banking operation. In the developed countries banking industries are more mechanised and digitised. But why could digitisation not save the banking industry from crisis in many developed countries? Actually there are many reasons for banking failing in many developed countries. My personal opinion is that the recent the crisis in banking industry in the US is mainly about the sub-prime crisis. That is, excess financing or over financing. In India we disburse loans to our customers about 75% or 80% or so of the total projects. But in the US, banks disbursed, in many cases, more than 100%.

We are dependent on foreign technology. In many cases, Indian technical persons develop digitisation machines in foreign countries. But we are lacking infrastructure to produce these. In those countries working condition is congenial for developing many new things. Actually we cannot ignore digitisation in the banking industry.