Experts discuss challenges and opportunities for commercial banks

Latha Venkatesh of CNBC-TV18 moderated a panel of renowned experts to discuss the challenges and opportunities for commercial banks on the second day of the 8th Annual SBI Banking and Economic Conclave.

Vaidyanathan said: “A lot of players who haven’t done a bank in the last 100 years suddenly have access to transaction data and they associate it with lending capacity. So let’s say I’m a fantastic Linda, but I haven’t had a great deal database for 100 years. Then we combine our lending capability with 100-year transaction data and make it open. So, I think India is moving quickly to open banking and it is the best form of open banking that exists in India. It is a big thing for India.

On credit growth, Bandyopadhyay said, “Reserve Bank of India needs to look at credit growth from a different perspective because bankers are not the only lenders right now. There are multiple sources of credit for you and me, I think the data is not captivating. So it’s a part. I think we shouldn’t be content with vanilla credit growth and that it should be three times the GDP. This is the kind of approach that I think we need to change. Do not look at credit growth in isolation, because there is credit growth, there are multiple sources of credit, there are loans at different levels that the RBI WSS weekly statistics do not capture, but go beyond it by mandate, I am fair if you will allow me to say that I see more challenges than opportunities.

On the challenges. Bandyopadhyay sees two great headwinds – one is the market – the greatest disintermediation in the market and technology.

Regarding export opportunities, Sahai said, “The last fiscal year ended with exports of goods of 291 billion and services of 205 billion. This year we are on track to reach $ 400 billion in the merchandise sector and about $ 250 billion in services exports. But our imports on the goods front will also likely reach around $ 550 billion, and service remittances will exceed $ 150 billion, much like the world’s freight boom. So we’re looking at international trade in a range of $ 1.3 trillion, which will be about 45 percent of GDP.

First publication: STI

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