The financial sector in India is at an exciting juncture at present with the reforms introduced by the government in the last few years providing it the necessary impetus to grow at an attractive rate. A robust performance by the financial sector is pivotal for lifting India’s growth rate beyond the 8% mark. This was the broad consensus of the panellists speaking at the session on ‘Building India’s Financial Sector’ at the Confederation of Indian Industry’s (CII) Annual Session 2018: Building a Better India Together: Responsible, Inclusive & Ahead in New Delhi today.

Speaking at the panel, Mr Uday Kotak, Vice President, CII and Executive Vice Chairman & Managing Director, Kotak Mahindra Bank Limited highlighted that the true broadening and deepening of financial sector is taking place in the country at present owing to the significant formalisation of financial savings which will eventually help in long-term capital creation. He acceded to the fact that digital economy especially the ‘Aadhar’ platform has made a profound difference in fostering the growth of the sector

Mr Leo Puri, Chairman, CII National Committee on Financial Markets and Managing Director, UTI Asset Management Co Ltd., stated that out of the two pillars of financial sector- Banking sector is currently facing headwinds, while the other, Capital markets is still in the emergent state, though its foundation remains strong. One of  the problem being faced by the banking sector pertains to the fact that the allocation of capital is dictated by political compulsions, patronage considerations among others, Mr Puri highlighted.

Mr Sanjiv Bajaj, Chairman, CII National Committee on Insurance and Pensions and Managing Director, Bajaj Finserv Ltd., shed light on the fact that there is a pressing need for technology to play a pivotal role in driving the growth in the financial service sector. He further stated that the requirement of multiplicity of KYC’s for different businesses needs to be brought down in order to usher efficiency into the system. Bringing down the costs for building a distribution line for firms engaged in financial services is also of paramount importance, Mr Bajaj elucidated.

Mr Sanjay Nayar, Chairman, CII National Committee on Private Equity & Venture Capital and Chief Executive Officer, KKR India Advisors Private Limited, stressed on the fact that though an impressive line of financial sector reforms have been carried out by the Government in the past, still more is needed. More importantly, they should be carried out immediately without losing any more time. He also gave the suggestion of a formation of a ‘Bad Bank’, that will absorb all the bad loans of commercial banks and cleanse the banking system.

Moderating the session, Dr Janmejaya K Sinha, Chairman, CII National Committee on Financial Inclusion and Digitisation and Chairman-Asia Pacific, The Boston Consulting Group India, concurred with the other panellists on the important role of financial sector for stepping up India’s growth potential.

8 April 2018

New Delhi