Finance ministry lays down law to state-owned banks.
Public sector banks have not been able to enjoy their freedom for long. Within months of giving them autonomy, the finance ministry has asked these banks to route all their advertisements through the department of advertising and visual publicity (DAVP), a wing of the information and broadcasting ministry, known for its expertise in tender ads.
The banking community is particularly peeved with this diktat. “Roughly, the ad spend of the public sector banking industry can be around Rs 250 crore annually. The government department possibly wants a share of the pie,” said a banker.
The Indian Banks’ Association (IBA), the apex bankers’ body, has taken up the matter with the finance ministry. “In today’s competitive market, DAVP is not relevant,” said IBA Chief Executive HN Sinor.
“Most of the banks are hugely into retail business. As the products become innovative, the advertisements need to be creative. The DAVP has no clue to creativity and innovation,” said a bank chairman.
Sources said the I&B ministry had recently discussed the issue with a committee of secretaries and informed the department of economic affairs of the decision. The banking division of the finance ministry has conveyed the decision to all PSU Banks “for information and necessary action”.
“Earlier, a joint public committee of the IBA used to oversee the advertisements of PSU banks. Even the RBI had its representatives on this committee and there was a limit on ad spends. This system was dismantled in mid-1990s when new private sector banks entered the scene. Asking us to route our ads through DAVP is a retrograde step,” pointed out another bank chief under condition of anonymity.