New Delhi: There is a greater need for Indian banking sector to become technology enabled and develop tools like APIs (Application Programming Interface) to compete with fintech companies in the credit business, former finance secretary, Mr S.C. Garg said in an ASSOCHAM e-summit today.
In his inaugural address in an ASSOCHAM National E-Summit & Awards – Banking and Financial Lending Companies, Mr Garg ascertained that banking in the digital era will have to fintechalise and public sector banks need to be generally readying themselves for the new age banking as it would improve performance and strengthen their finances.
Mr Garg also said that banks need to be able to match efficiency and service of the fintech companies in the retail loans as well.
Speaking on the occasion, Mr Ajit Pai, Distinguished Expert and Consultant, Vice Chairman, Niti Aayog said that credit growth in India during the past seven years has decelerated, whereas for India to grow to a $5 trillion economy, our credit growth must be substantially greater.
“There is a need to see how to increase the number of people that are credit worthy in India as quickly as possible with three years of economy formalising i.e., three years of GST data,” said Mr Pai.
Noting the need to accelerate overall credit, he said that the government has taken steps in many ways. “We want private credit to be growing faster, we have laid the foundations with JAM (Jan Dhan-Aadhaar-Mobile) Trinity, GST and shift to GDP.”
In his address, Mr Sunil Mehta, CEO, Indian Banks’ Association (IBA) talked about the challenges being faced by banking industry in adopting digital technologies together with need for greater investment in cybersecurity and the sector’s response to the clarion call given by Prime Minister for making an Aatmanirbhar Bharat.
He said that the banking sector will have to make greater investments in information technology, creating infrastructure, utilising new technologies like cloud storage so that it becomes more cost-effective, machine learning, blockchain technologies which facilitate adoption of new generation digital products.
“The entire banking system will have to find the ways to deal with challenges related to technology by may be redesigning their existing business model,” said Mr Mehta.
Impressing upon the need for investment in cybersecurity, he said that long term success of digital transactions will depend upon security being offered to users and that can be done by being vigilant about such threats that are rising manifold by the day. “The entire financial system will have to look into it because managing cybersecurity risks have become an enabler for continuation and escalation of digital banking journey as we go ahead.”
Talking about the response of banking system to clarion call for making an Aatmanirbhar Bharat, he said that IBA has taken lot of initiatives in this regard, supporting MSMEs during onslaught of first wave of Covid-19, emergency line of credit. He also thanked the government for being supportive and taking necessary steps.
“Response of banking system has been duly supported by the regulator as well as the government and has helped many entrepreneurs countrywide to sustain the onslaught of Covid-19 and sustain their survival,” he said.
Mr Vineet Agarwal, president, ASSOCHAM in his address lauded the RBI (Reserve Bank of India) for taking certain stern but forward-thinking steps last year when India was on the cusp of being hit by Covid-19 pandemic.
He also appreciated that the use of technology in banking and financial services sector has accelerated tremendously.
Amid others who addressed the ASSOCHAM E-Summit included: Mr Rishi Gupta, co-chairman, ASSOCHAM National Council for Banking and MD & CEO, Fino Payments Bank Ltd.; Mr Umesh Revankar, MD & CEO, Shriram Transport Finance Company Ltd.; Mr Ashvin Parekh, managing partner, Ashvin Parekh Advisory Services LLP and Mr Anand Sinha, former deputy governor, RBI.