At the Business Standard BFSI Insight Summit held on Wednesday, heads of India’s leading public sector banks expressed optimism about the banking sector’s future, suggesting that the best is yet to come. Satyanarayana Raju, managing director (MD) and chief executive officer (CEO) of Canara Bank, stated that public sector banks are still in a “honeymoon phase” and are progressing from strength to strength.
"Last year, I was asked if the honeymoon period for banks had ended. I said, ‘no.’ Today, a year later, I stand by that," Raju said.
In conversation with Tamal Bandyopadhyay, consulting editor at Business Standard, Debadatta Chand, MD and CEO of Bank of Baroda, noted that all public sector banks remain strong across 10 key banking parameters.
"The Indian economy has a ‘strong and sound’ footing. And banks replicate the economy. Thus, banks are safe and will sustain in the near future," Chand said.
Speaking on growth opportunities, S L Jain, CEO of Indian Bank, shared a positive outlook, stating, "Banks are the mirror of the economy, and it has good days ahead."
Regarding interest rates, Jain predicted reductions could begin from the next quarter, offering some relief to borrowers.
Ashwani Kumar, CEO of UCO Bank, discussed innovative methods banks are adopting to enhance customer service, notably through data analytics. "Many innovative products are being offered to customers," he said. However, Kumar highlighted the need to improve underwriting standards and risk management practices as banks introduce new products.
On the topic of personal loans, K S Raju clarified that such loans are offered exclusively to salaried individuals and pensioners who receive their salary or pension from the bank. "We give personal loans only to the salaried class and pensioners who draw their salary or pensions from our bank," he said.
Kumar added that UCO Bank’s personal loan process is data-driven and selective. "We don't approve personal loans for everyone who applies. Applications are reviewed, and loans are sanctioned only if they meet the criteria," Kumar said.
He further noted a deregulation rate of less than one per cent over the past two to three years, describing it as "significantly lower."
Discussing deposit costs, Kumar observed that these costs have stabilised for most banks over the past two quarters. "Deposit rates are now almost stable. Deposits are available in the bulk market, and going forward, deposit rates are expected to decrease along with the liquidity within the system," he said.
Addressing the role of technology, Chand highlighted that Indian banking is advancing rapidly, often surpassing global standards. He mentioned the introduction of "phygital" branches, which combine physical and digital services, as a significant advancement. "India has a large population, and digital technology is a key way to cater to everyone’s needs. We introduced the concept of a ‘phygital’ branch, and the response has been very positive," he said, adding that digital channels are handling a volume beyond conventional comprehension.
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