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I believe in India's vision for sure, but several issues need to be sorted to realize our full potential: Rajnish Kumar, Chairman, SBI

Jan 04, 2020

 Had an interactive session with industry captains at 'FICCI Dialogue for Actionable Insights' at Hyderabad


HYDERABAD, 4th January 2019FICCI Telangana State Council, organised the first edition of ´┐ŻFICCI Dialogue for Actionable Insights´┐Ż with an interactive session with Mr Rajnish Kumar, Chairman, State Bank of India; on the theme "Outlook on the Indian Economy", on Saturday at Hotel Taj Krishna. Also present on the occasion were Dr Sangita Reddy, President, FICCI; Mr Dilip Chenoy, Secretary General, FICCI; Mr T Muralidharan, Chairman, FICCI Telangana State Council and Mr A Murali Krishna Reddy, Co-Chairman, FICCI Telangana State Council and was attended by Senior Government officials, CEOs, Industry representatives, financial institutions, diplomats and academia.


Speaking on the occasion Mr Rajnish Kumar said, technology is playing a critical role in shaping the global economy, Indian economy and also the banking sector besides all other sectors. For banks like us earlier in terms of competition, up to 90 it was between State Bank and Public Sector Banks, than it was State Bank, Public Sector Banks and Private Sector Banks and now we have new competitors in the form of Fintech, who are bringing in lot of innovation. So a historic or a legacy bank like us has to respond to the rapid changes that are taking place, some satisfaction is we have been able to match that. For consumers we have a state-of-the-art offering in the form of YONO, last two years we focused on retail banking and have 1.7 crores registered users and there is a huge shift from internet banking to mobile banking. We as a banker, view corporates not just as a client but as a large ecosystem comprising of various stake holders associated with it. We want to be an integral part of the entire ecosystem and tap the complete structure. Our focus with Corporate Banking is no more lending money alone, the performance criteria is how much we are helping the ecosystem around the corporate. The MSME sector is getting more and more formalized, which is a positive sign of GST and demonetization. Today the availability of data on MSME is much more and that enables Banks to lend loans in a easy manner end to end, loans up to 5crs is now possible. The current loan disbursement though emudra of SBI is up to Rs 50000 and after January 31st it will be up to Rs 100000, the application is digitized, no paper work and no manual interference. Technology is definitely impacting positively and raising the productivity hugely, with this credit cost will come down and that benefit will be passed onto the corporates, so everybody gains in the process. Today there is a complaint about high rate of interest, one of the contributing factors is high default ratio and a high loan loss ratio, the banks have to recover the credit cost and all that gets loaded to the customer. If you look at it India is not far behind in adoption of technology, which in turn is enhancing the overall productivity, unless our productivity goes up, we can't compete at the global level. I believe in India's vision for sure, on account of its demography, adoption of technology and the productivity, but there are several issues which needs to be sorted out before we realize our full potential.


Dr Sangita Reddy, President, FICCI said that looking at the economy, 24 months ago we were looking at a very different prospects in terms of our trajectory, we were to be the shining star on the global map, but in the past 24 months we have been through ups and downs, but what is scaring every corporate and every Indian in the face is a combination of slowdown in consumption, which is at the core of lot of our problems, arising from an overall lack of growth prospects or loss of jobs, certain amount of uncertainty, besides the invest climate looking weak. There is a overall slowness in terms of investment, though the FDI looks good which is due to multinational companies bringing investment into their back offices here, by which they are tapping the Indian brain power to fuel global companies growth, but this has minimal impact on the Indian economy. But the positive aspect is the banking sector has emerged stronger the number of NPAs is down, the GST consolidation is a positive step, the screening and methodology is strengthened, the technology adoption is enhancing productivity and therefore the overall sector should be stronger, but the road to travel is much more far. At FICCI, we need to talk about the entire aspect of structural reforms, in a recent report brought out by FICCI, it is estimated that there are 8000 different clearances, permissions, license, processes, which have to be done for a single manufacturing company to open. Also of late the senior leadership in companies spend 3 to 5 hours in board meetings with lawyers, audit and compliance, rather than focusing on growth and innovation, which they should be doing. So this combination of aspects is slowing down the economy on the other hand I believe it's a great opportunity to bounce back and 2020 could be the year we find a way to do that. I also believe the dream of $ 5 trillion can be achieved only if all of us work together, however powerful the spirit of Indian entrepreneur is we can't do it alone, even banks or government can't do it alone. There is a need for major reform in Agri sector and significant boost is needed in the exports, in fact India's share is just 1.7% in terms of exports, which presents a huge opportunity to improve. I think, together we can and together we should, because just not to our potential as a country but also to our future generations, because having reached this momentum in India's history of both economic and developmental, it wouldn't be the right time to slow down, let's find a way to change our path. Despite the fiscal deficit, the government should find ways to infuse at least Rs 1 to 2 lakh crores into the economy to boost construction and infrastructure, to clear up the back log of pending payments. The Government needs to put stimulus in terms of financial, need for structural reforms, need a sentiment boost and consumption boost to re-accelerate the economy.               


Mr T Muralidharan, Chairman, FICCI Telangana State Council, said that this session unlike the regular format, is designed to ensure a dialogue and thereby get valuable insights. 


FICCI Dialogue For Actionable Insights, is an initiative to bring National Leaders and CEOs, Capitan´┐Żs of Industry, Government and Academia on a single platform to deliberate on topics of National Interest. It serves as an excellent forum to gain insights to enhance business excellence and achieve sustainable growth. The Interactive Session hosted today debated on Outlook on the Indian Economy, Current State and Future of Banking, Current challenges in Banking Industry and Current challenges in funding of enterprises - large, medium, small, start up, social ventures - in India and Telangana.