8th Banking & Finance Conference on Changing Contours of Banking and

India’s Growth Aspirations

Mumbai, April 18, 2016: Addressing the 8^th Banking and Finance conference, Mr. Jayant Sinha, Hon’ble Union Minister of State for Finance and Chief Guest said that the key objectives of the government are the need for financial inclusion, the efficient allocation of capital and thinking about the future. The manner in which the financial sector is currently structured is creating tension and this needs to be resolved at the earliest. His government has increased the number of new entrants into the sector (23 new banking licenses issued) and has also raised FDI in insurance to 49%. In terms of technological changes, he highlighted particularly on the unified payment interface, which is making possible the digital transfer of money. There is in place the development of a range of products tailored to the base of the pyramid.

The Indian Merchants’ Chamber (IMC), in association with theInstitute of Chartered Accountants of India (ICAI), had organised this Conference on Monday, April 18, 2016.  The theme of the Conference was “Changing Contours of Banking and India’s Growth Aspirations”.

Mr. Sinha further stated that the government has to play the regulator’s role by understanding policy gaps and trying to close them. He also informed that his government is also working closely with the RBI and other stakeholders to understand where the stress in the system lies and is trying to alleviate it. His government has restructured policies to change the appointment system to top positions in PSUs. They are working hard with banks to build up talent and capabilities. The development of risk management and surveillance mechanisms are top priorities for them.

Indian banks need sufficient scale to become globally competitive. The government is making concrete efforts in this area. As the government continues to work on policies, the issues confronted when they took charge in 2014 are now rapidly being closed.

Mrs. Arundhati Bhattacharya, Chairman, State Bank of India was the Guest of Honour at the inaugural session. She opined that there is a sharp rise in NPAs in banks’ due to which the sector is going through a period of stress. Two successive droughts have exacerbated the situation. Some questions asked in the early 1990s are now being asked again. The performance of public sector banks has deteriorated in the past, but of late it has converged with that of the private sector banks. In the long run the CAGR of both public and private sector banks is almost identical. Further more, she reiterated that competition and technology are interacting with each other as never seen before. Mobile banking is leading to a revolution and it is going to particularly benefit the youth and techno savvy sections of society. The biggest gain from technology adoption by banks is that it helps attract and retain younger and more affluent customers.

Mrs. Bhattacharya further spoke about the changes that need to be meted especially on the narrative in the media.  She quoted “Mistakes have been made by all stakeholders and we need to find and fix them. Banking remains one of the most regulated sectors in the world. However, the challenges ahead of us will end up strengthening the sector”.

Mr. Dilip Piramal, IMC President said “Technology is changing the banking landscape and it is heartening to see a strong commitment of the government to interact with business leaders. The development of risk-management techniques are becoming increasingly necessary to deal with an increasingly uncertain financial landscape. Digital banking and financial inclusion go hand in hand, and the adoption of technology will help resolve many issues facing the sector. However, resolving the NPA issue should be a top priority for all stakeholders. He congratulated Mr. Chandan Bhattacharya and his team for putting together a very successful event.