Sanjiv Bajaj says non-banking firms must be allowed to expand financial services

He said, “Today, I can understand that a big difference between banks and NBFCs is that the consumers' money sits in banks, whereas with an NBFC you are not allowed to do that. So keep that difference."

Bajaj said the RBI must open up lines of financing from RBI to NBFCs as has been done during the pandemic "Provide that as an additional show of confidence — allow NBFCs to get into many other lines of business where currently, only banks are allowed. Again, put the necessary guarantees in place for that," he said.

Bajaj said he believes that in the long term, NBFCs' licence should be seen as a learning licence towards banking. "Finally, in this digital world, I believe that RBI must work on a discussion paper on what is good for the future of banking," he said.

Bajaj believes that the country have always been in a period of uncertainty. “We are in volatile times, as we say, and one thing that Indian industry has learned is to stand up to such challenges,” he said.

Bajaj blamed the rise in inflation to the ongoing war in Ukraine and the continued disruption to global supply chains. "Food prices also playing the spoilsport, and also fuel prices. Now here at CII, we believe that from the earning forecast, we are looking forward to a good monsoon, which means food prices should start moderating pretty soon,” Bajaj said.

Bajaj further said he is of the opinion that normalisation of interest rates will bring inflation numbers down somewhat. "Secondly, interest rates should not come in the way of additional investment, which will still be far more attractive than what it was two years ago. So for us to get back to — at CII, we predicted 7.4 to 8.2 percent — GDP growth this year should be possible, we just need to take care of some of the externalities and the immediate inflation,” he said.