Technology has shaken up the banking sector in India. Various digital transformation measures have disrupted the industry and will continue to do so in the long run. This will happen at a more rapid pace than we have ever known. In that light, Shaktikanta Das, governor of the Reserve Bank of India (RBI) started the proceedings by reinforcing the theme about why banks need to look beyond tomorrow.
He also spoke about various opportunities and challenges faced by India’s lenders. He acknowledged that these are “turbulent times” across the globe. But he was more optimistic about India’s situation. “The recently released Financial Stability Report by the RBI highlights that the Indian financial system remains resilient and supportive of the ongoing economic revival. It also shows that banks are well positioned to withstand even serious stress scenarios without falling below the minimum capital requirement”.
The first panel discussion focused particularly on what the future is in store for an industry from “an outside in perspective”, said Sanjiv Chadha, Managing Director & CEO of Bank of Baroda, who moderated the session. “Technology for every industry is like your spine. If you don’t have a backbone, your brain is not getting the signals. Technology has become like that to help customers get the experience that they deserve,” said Arundhati Bhattacharya, Chairperson and CEO, Salesforce India.
Rashesh Shah, Chairman and CEO, Edelweiss Group acknowledged the increasing role of Non Banking Financial Companies. But banks, he said, “will continue to remain important in the mix given that the savings franchise will always rest with them.”
Dilip Asbe, MD and CEO of National Payments Corporation of India, who joined virtually for a fireside chat, spoke of the key milestones in his industry. The erstwhile long periods for money to be remitted in bank accounts and the associated inefficiencies have been weeded out on account of a slew of innovations in the financial sector.
In the session that followed on new frontiers in financial inclusion, Vikramaditya Singh Khichi, executive director of Bank of Baroda chose to focus on “financial health” and how the financially underserved “want a rightly designed and rightly delivered financial services”. Amit Arora of the World Bank’s Rural Development Finance division said that “India and Bharat need to be looked at from a different lens.”
In the session that followed on “Innovative technologies and new business models”, Akhil Handa, Chief Digital Officer, Bank of Baroda set the ball rolling by talking about the bank’s recent digital transformation. But five years from now, Ajay K. Khurana, Executive Director of Bank of Baroda spoke of “a new way of banking that focuses on paperless branches.”
The penultimate session of the day was on Environment Social and Governance (ESG) finance and tackling climate change. “Climate change is looming large as the next major driver of economic transformation”, said Dr Mukund G Rajan, Chairman, ECube Investment Advisors Pvt. Ltd, “driving frenetic activity around the world”.
The final session of the day, anchored by Latha Venkatesh, Executive Editor CNBC TV18, focused on the state of the economy over the next five years. Madan Sabnavis, chief economist at Bank of Baroda opined that with 7-8% growth in real GDP and an inflation of 6%, India was looking at 13-14% growth in nominal GDP. From the standpoint of the Indian economy, it needs to be driven by consumption-led growth and not an investment-led one for it to bounce back to its pre-covid days.
“Going ahead, the world of banking is expected to be more collaborative as well as competitive with newer players offering innovative financial products,” said Shaktikanta Das, the RBI governor.
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