CNBC-TV18 PwC Banking Dialogue: Top bankers on India's growth, the future and more

Tewari: So the RBI governor was very clear that even though the inflation forecast has been reduced by 10 basis points as you point out, he says the risks remain in terms of uncertainties in the external environment. And as long as the war in Europe continues, as long as there is pressure on commodities, and food prices, largely emanating from the external sector, and there is uncertainty around El Nino and the weather forecast and therefore the impact on food production, he would like to keep the inflation forecast at a slightly elevated level so that there is closer monitoring, more dynamic action and the prospects of a rate cut.

Daruwala: I would say so, but having said that, it all depends on how the monsoon is. If we see a good monsoon, then clearly we will see a little bit of the food, inflation, etc. coming off. And hopefully, then, we might see one rate cut by December.

Shaparia: I think coming out quite clearly, at least the way we see it now, is that the MPC will need to come up with a couple of cases where they will probably talk about liquidity to be controlled and let go to give a sign to the market before cut rates. So probably the financial — not the calendar — year could even slip into April.

Kumar: I think instead of, say a rate cut, what we need to see is when the situation is going to improve on the ground. And the situation on the ground would be more in terms of inflation because they are not going to compromise in terms of inflation going up, and there would be a rate cut. So I think as long as the inflation remains elevated, there is no possibility of a rate cut.

The inflation will definitely depend this time on the monsoon, but also in terms of the supply chain. What happens in the international share markets — if there are recessions around the world, if the demands are low, there would be issues in terms of raw material prices. And if the inflation is not coming down, - I don't see rate cuts, at least not this year. But hopefully, it starts happening in the financial year I think that would be very good.

Parthasarathy: Banking definitely makes a huge impact on the country's growth objectives. And if we have to be the third-largest economy by 2030, then the banking sector plays a huge role. Overall, I think the sector has been highly resilient. And also, the profitability has increased in the past few quarters, which is a positive sign from a growth angle.

More than anything, of course, if you look at the credit growth from 2022 to 2023, it's been pretty high at 15 percent, and, in terms of all the scheduled commercial banks — public or private — the NPA gross or net ratio has been coming down. Whether you look at it in terms of the low slippage ratio, or the net interest margin (NIM) improvements, I think the sector is doing well.

Digital transformation is happening all over the country and in the banking sector. The innovations that are coming across in payments, whether it is UPI, UPI Lite, or anything else from a fintech ecosystem, it is all about how disruptive technologies can help banks further strengthen and grow.

What can be done next is that we have to reach the last mile. Obviously, credit inclusivity needs to come to the bottom of the pyramid — how do we further enhance it? What are the actions that need to be taken and how can we do it? Because at some point in time, if you look at India for growth, you really need rural entrepreneurship to thrive.

Disrupt through technology and through data, and now, with generative AI, multiple things are coming up which can be used for banks.

To me, the most important thing is talent. The way in which we are growing, and the way in which the transformation is happening, the talent that's there today will not be the same talent that we will be needing in the future. How would you future-proof it and what kind of upskilling, or cross-skilling is needed?

Finally, while all other sectors are focusing on sustainability, how can banking come up with an integrated strategy on ESG, and would that be feasible and then what are the steps that can be taken?

Sabharwal: If you look at the basics, I think a lot of them point to a much, much better future for us. We are a much larger economy. We have got the digital ecosystem working for us. We have seen per capita income growth, and I am also seeing wealth being distributed in a better way. We have seen the rural economy, it did suffer for some months, but we have seen it coming back and we are seeing a big thrust for Make in India. I feel manufacturing has the potential to create a lot of jobs too. So if you look at all of these happening, plus, so many other external factors, the China +1 story, and so many others, I believe that this year, definitely, we will see a growth of more than 6.5 percent. I am very optimistic.

Sabharwal: I feel that we will be somewhere closer to 6.75 because the RBI governor was speaking about interest rates — whether there is an interest rate cut or not, we are already seeing the benefits of lower interest rates. The short-term interest rates are down, the long-term interest rates have also moderated and where we were expecting interest rates to move up, they have actually come down. So we are seeing the benefits of that — whether it translates through a repo rate cut or not, the benefits are accruing. So this will give us an impetus. And I see no reason why, if we look at it over a longer period, we shouldn't be back to growing at somewhere closer to 7.5- 8 percent.

Singh: So if you look at the last two, three years, we have seen the COVID period. So all the interventions of the Government of India and the digital part, whatever we have seen, have made immense inroads and given immense benefits to rural India. I will give examples from my bank — if you talk digital account opening today, for me, the rural areas engage 100 percent, and not even a single account is opened manually. But that's not the case in places like Mumbai and Delhi.

Rural India has adopted the technology to the extent possible, and the type of UPI use, and QR-code use have increased so much right now that they are going to have an immense impact on the Indian economy overall. We have seen the resilience of the rural economy, in fact, during COVID, there was hardly an impact on the rural economy. During the second wave, there was an impact, but they really bounced back very fast.

If you look at the day-to-day activities of — especially the economic activities — in rural areas, they are actually almost normal, and the cash flow has increased significantly. The activity level has increased significantly, the money flow has significantly improved and employment has improved significantly during the last two years. And even the repayment rates have significantly improved in the last two, three years. Actually, our rural economy, from the collection point of view, has actually gone up. It is almost very close to normal.

So, we are seeing normalcy and these aids — the ‘JAM trinity’, for example — give some pluses to you. Also, when demonetisation happened, people used to have only a cash economy, or everything used to happen through cash only. But today you talk of anyone in microfinance, nobody is dealing in cash today. Even for collections,  people have moved to non-cash, less cash, or a cashless economy.

The biggest challenge for the rural economy has been the operating cost because the ticket size is low, and the distances are high. So technology is playing a very big role. A rural economy, or a semi-urban rural economy, is really growing fast and growing in a very balanced way.

Venkatramu: Absolutely, there is no doubt about it. In fact, I would like to add that if you go back, maybe eight or 10 years, the way we have started with the Jan Dhan, probably we have gone in a very, very systematic way, in terms of creating that infrastructure. First, we started with the Jan Dhan, where almost 46 crore accounts got opened, and then the DBT push through these bank accounts. This was the first step towards financial inclusion. The second is, what is required in terms of access to these services? And third, most importantly, access to these banking services. Today, if you look at the kind of BC network that is available, whether through the India Post network or to other BC networks, I think that is very, very strong.

So all of these have added to creating a physical infrastructure and these kinds of areas, it has to be 100 percent digital. So what we have observed is that wherever even a small element or component of a paper-based process comes in, that becomes absolutely unscalable. So if it has to be scalable, it has to be 100 percent digital, and the adoption rate has been phenomenal when it comes to this segment of customers. Leveraging this infrastructure and adding more and more services to this can actually pave the way for future growth.

Venkatramu: That is subject to regulation. As per the current regulations, we are not allowed as a public sector entity. But we are trying to socialise through various policymaking bodies. We are trying to collaborate with various players. Today, the cost of service delivery, especially when it comes to credit, is very, high. How can we reduce that cost by using technology and data? This requires the collaboration of various players, not only traditional banks, but maybe even non-traditional players. We have seen in the case of UPI, how it led to phenomenal success where a combination of both traditional and non-traditional players joined hands, and today, we can see its success.

Tewari: You are right — bank balance sheets have cleaned up over the last 4-5 years, and banks have made record profits in the last year. We had a daylong meeting of the entire board — public sector and private sectors, separately — wit the rBI governor and the theme was largely this: you have to be cautious and be more careful about other areas, which so far, other than the NPAs, we have perhaps not paid as much attention to, like sustainability, and climate risk.

Going forward, I see big opportunities — one is climate finance itself. Now, with the targets India has set till 2070 and 2030, the interim targets, the opportunity till 2030 itself is around Rs 30 lakh crore. Our balance sheet domestically, the loan book, is about Rs 28 lakh crore. So we can double that loan book if we capture the opportunity,. But we alone can't do it. This involves myriad things from EVs, the battery, the switching, the swapping technologies, and renewable, which continues to be a strong player. Then going forward, battery manufacturing, pumped hydro — all kinds of things. So I think that's one very, very big opportunity that all banks have, and which we should start to leverage very quickly because this is part of our national contribution and national commitment. We actually need to do it for the planet itself.

As for the rural economy, we are in the digitisation age and end to end digital small ticket loans have made it grow very well, and therefore we see good growth. But the opportunity we still have not leveraged very well is the urban economy — urban financial inclusion and the way we deliver to urban areas, because too much focus has been there on rural, and rightly so. But India is urbanising at a very fast pace and apart from the urban infrastructure, which is a separate category where a lot of opportunity exists, we need to take into account the more and more people coming to cities, and these are people with slightly higher earnings — just that they are not your typical salaried class employees in a good company. How do we take care of them, whether through a BC model or through an MFI model —  that is something we need to work out.

Infra continues to be very, very big, as always, so road building, REITs, and the infrastructure investment trust (InvIT) models, which are coming up, and are getting refined, continue to be a very, very big opportunity.

Krishan: I don't necessarily want to take a contrarian view. But if you look at the panel that we did just two weeks back, we had a bunch of consumer CEOs on the panel, and what they told us was that growth was slowing down. With the credit hikes, the credit cost is now starting to pinch the consumer. So to the question that we were asking earlier, I think it's definitely a good time. From a bank standpoint, I think the fact that the bank balance sheet has been cleaned up, NIMs have been going up over the last few years, etc, I think they are all good things. But, I am also slightly concerned, when we look at the way the banks have grown their balance sheets and a lot of it actually is driven by retail loans.

Now, the economy needs to continue to be in a good state and now there are clearly certain areas that were identified which could actually challenge the economy per see, and because of the composition of the loan portfolio of the banks, that could be a challenge. And I am sure the governor was referring to that and many other things. So I would say that, yes, I we have had, because of the insolvency code, because of high credit off-take, and maybe the pent-up demand, a good few years. And there are good reasons for us because geopolitically and geoeconomically, India seems to be in a much better position. Services, captive growing, manufacturing through all the PLIs there are a lot of good things happening. But there could be bumps ahead.

Sabharwal:  So I wanted to pick up on what Sanjeev mentioned and what Gayathri mentioned earlier that for an economy like us, which is in a way credit-starved to an extent, credit is going to be the driver for growth. And I do believe that credit is going to be a strong driver for growth. So I just wanted to pick up two points that were mentioned in terms of higher intermediation costs in the rural markets. But if I pick up the microfinance business, it has the highest ROA among all assets. So how can the highest ROA be in a market, which has the highest distribution costs? So there is a dichotomy there.

Second is my view, I may be wrong, so while everybody is making huge profits, I think we need to look at where are those profits coming from. Are they coming from higher margins, lower operating costs, or lower credit costs? If they come from lower operating costs because of digitisation and lower credit costs, it is positive for the economy. But if they come for higher margins, then these costs are being borne by some of the companies. So I think we should look for more profits, all of us should look for more profits but if they come from operating leverage, and lower credit costs than margins, they would be better for the economy.

Kumar: First thing all of us need to realise is that we belong to the most populous country in the world. It is a very large market. Today, when the banking sector is talking about the prospects of the future and when the entire world is looking towards India because this is a very large market, the important step to take it forward would be inclusion. So how we can see whether this is about rural India or whether this is about urban? How we can cover our population within the banking channels? I think in the past few years, we have been able to do successfully in terms of opening their liability accounts, and making the transactions available, very conveniently, but I think the next phase is how we can cover from a credit perspective. So I think a very large section of the population today is not covered and I there I think all of us are seeing the opportunity.

But the important part is first we need to build the capabilities within the institution to handle that kind of credit and then go for it. When we are talking about going forward, there may be some risk, there may be some roadblocks. I think those issues would be there when we go for those kinds of credit opportunities without building adequate safeguards. So I think for anybody who works towards this, builds digital solutions, and lowers the operating costs, there is a huge opportunity.

Daruwala: I think, as a country, we are still very tiny. When we look at globally the last two or three years, about $32 trillion has been spent on climate change. India is 1 percent of that. Having said that, I think the last two-three years, the kind of acceleration that one has seen in the kind of investment is quite, quite significant. And the heartening thing is that it's not the big companies who are talking, it's even the small vendor, who is conscious that, if they exporting, their ecosystem will be expected to be climate compliant. They are also thinking of how to have renewable sources of energy, or even recycling of water or many other things. So I think it's a very good development happening.

Having said that, of course, there are countries who are giving a lot of set of economic benefits. So if you look at Japan, for example, the first year is interest-free, if you are investing in renewable projects, China is also giving about 60 percent of the amount that is lent a concessional interest rate, the US has announced $300 billion-plus in various incentives, guarantees grants, etc. So we see globally, a lot of momentum coming.

Coming to India I think today, in sustainable finance, there is no particular benefit in interest rates or anything. So if you look at other countries in our network, sustainable deposits when they are accepted by banks actually give 25 basis points lower and pass on that benefit when they lend. But we have not reached that level of evolution.

The other thing if we look at globally, for example, PRA, our global regulator, gives you a benefit of risk-weighted assets of 25 percent benefit. Of course, there's a guideline, but if you comply with that there's an incentive to the bank in terms of risk-weighted assets, which means you are consuming less capital when you are doing renewables. So I think some of these things will evolve as we go along. But having said that, I think SEBI came out with guidance to ensure that you don't have to greenwash. So I think it will accelerate and we are already seeing a lot of dollar money really focused on pure sustainability-related investments. So if clients have access to the pools of money, huge, global pools of capital, equity, and debt, so definitely one we will see quite a bit of momentum coming into play in India also.

Shaparia: When we look at it in terms of the broader needs, I think the banking industry has a lot to do. As was mentioned, the growth in this country is going to go quite high. Banking, currently $3.3-3.5 billion of the GDP, is expected to grow to around $6 billion by 2030. Manufacturing, as of now, is 15 percent of the GDP — somewhere around $500 billion. If you have an ambition for manufacturing to be around 25 percent by 2030, then you need $1.5 trillion. To put that in, you will need a capex that is at least double that — different industries have different needs. So, the amount which is required is not something which only the banking sector in India can fully fulfill.

We have domestic savings, but they will not be enough. So, I think there is a need to find other pools — we need FDI, FPI, FII, and we need to access those pools in a manner where investors are interested. And sustainability is going to be very important. So, I think there is a huge pool that we need to bring in and India is a destination where everyone is also looking at. So, I think there is a combination of what our industry needs to do onshore as well as how to tap capital flows, which we need to get to meet our ambitions.

Tewari: In our case, 40 percent of the emissions are from the power sector. And in the power sector, a large part of the production is thermal still, despite all the advancements in renewables. So, we need to package it in such a manner that while we will continue to have thermal for some time as a base power, how do we reduce the emissions from thermal power itself? This is not something we have worked on. So for example, by installing flue-gas desulfurization, by installing coal washery — there are many low-cost interventions which can be made in renewable power, I mean, the thermal power and if we measure the emissions starting and the subsequent emissions, which are shown to be reduced, in a manner, which is accepted by the international financing community, I think we should be able to attract some investment in those areas also, which are as of now a strict no-no.

As soon as we mention coal, people say "No". So, if we need to package this, and then leverage this with all the other players, including multilateral, there is no shortage of capital, like Zarin said, we are able to get a lot of capital, but all of them want to go into pure renewables or pure so-called green. Nobody wants to talk about a transition from where we are, and continuing to use thermal etc.

Sabharwal: It's a huge opportunity, I don't think there is going to be any other economy that is going to see such a rate of growth in per capita income. I feel on the individual side, it will obviously lead to humongous growth, but it should lead to a huge number of new products coming into the market. While there will be traditional products, but I think wealth management will go through a sea change. And all the people in the industry have had to think of how it can be looked at from a customer's point of view, and not from a fee point of view.

We will see even new asset classes in a way or redistribution of money across asset classes, whether it is real estate, whether it is gold, whether it's markets, or debt, I think each one of them will see a new set of products emerging —things that will lead to long term wealth creation. We could see even miniaturisation of wealth management because while we will see wealth increasing on the urban side, so will we see it on the rural side. And again distribution costs will become important. So we may see a lot more of miniaturisation also.

Kumar: What I was sharing in terms of inclusive growth, I think that would be very critical. But I think the best thing is digital adoption by a very large population. Today, if we see, most of the SIPs are coming from rural areas. Even there is an equity participation from those people like who are not able to save in a fixed deposit. So there are queries in terms of whether they can invest in a fraction of a share. So I think this fractionalisation and offering some of the products in the sachet to our large population would be definitely where there would be more inclusive wealth creation. Just see the level of awareness, they understand that it is possible.

Daruwala: I think if you look at financial savings, it's now 12 percent of the GDP, and physical savings is 10 percent I think that mix will change as the per capita income grows. India has, I was reading some report, 8 lakh dollar millionaires, that is expected to double in five years to 1.7 million millionaires, dollar millionaires. And what we see in India is that about 12 to 14 percent of people go for professional management of wealth. If you look at China, it's 60 percent plus. So the higher the economic growth, the more professional wealth management comes into play.

In our own bank, we have seen our business grow double digits annually for the last few years. I am sure it will continue to be that way. So more and more, people will use professional management, as wealth increases because what happens is the diversity of products that comes into play. For example, in the last few years, the number of AIFs that have come right needs a little bit of sophisticated wealth manager to help an individual, it is not like an SIP that you invest. So different forms of wealth management will come into play and to me the opportunity for the next two decades in wealth management seems very, very good.

Shaparia: I think opportunities are going to be there, but I think the key is, each one will have to look at the USP, you offer and I think we will all have to find our USPs — how we add value to the customer. To the very point Rajiv made, let's not look at making margins, but see what value we add, and I think different players will have their strengths. The point is that the market is so huge each one with their USP will find enough to grow. So, I completely do agree that this part of the industry will grow faster than the lending industry.

Sabharwal: One more change that we will need to watch out for is, whether you make money through distribution income or advisory fees.

Singh: So there are two or three aspects to it. The cost of distribution for large cities could be lower. Second, I see that not only in the future but in the past too many entrepreneurs have come up. In the hinterlands, in semi urban areas, they want to experiment and take a risk. I think that will bring about experimentation growth and the risk-taking ability of people.

Thirdly products and services, if you see 20 years ago, If I have to move from a metro to a smaller town, we used to think that nothing will be available. That's not the case today. In the case of financial services too, things like a loan against property, a very simple product, were an urban phenomenon. Till 10 years ago, no one from rural or semi-urban areas even considered loans against property. Now, there is a big market that is still growing.

If the cost of distribution is lower, if digitisation is there, things will develop further in the rural areas.

Venkatramu: There again, the online platforms which are available are probably bridging that gap. Definitely, the aspirational value is catching up but the kind of availability that you have, especially on the online platform, is catching up.

The other important factor that we need to see is that the risk-taking ability is probably more across the kind of people who are from a younger generation, as compared to the older generation.

But there are still large sections of the population which believe in traditional savings, particularly postal savings. The recent launch of the Mahila Samman Saving Certificate Yojana has seen a good uptake, with almost half a million customers in less than two months. So that is one aspect.

The other aspect especially at the low end of the segment or at the bottom of the pyramid is that they have the ability to save towards certain goals, like goal-based saving. So if you know that you want to purchase some consumer durable over a period of six months or one year, then there is an incentive towards savings. So those small short-term savings are something that is also catching up because of the aspirational value.

Tewari: One, of course, is the expected credit thing — the RBI is bringing out a discussion paper, and they believe that we need to align with the world. Everybody else — Europe, and the US — is on that model, the IFRS. So we also need to go there. Of course, we have to see how we steady it out so that it doesn't trip growth. Because right now, the balance sheets are cleaned up, growth is happening, credit is growing at twice the rate of deposit growth. So we don't need to stop that part. So with that caveat, we should go that way hopefully in the near future.

Having said that, there are multiple things — one being climate finance. We are in conversation with the RBI to bring those kinds of enablements, like risk-weights, like including that as part of the priority sector. Right now, the priority sector definition of climate finance is very narrow — compressed biogas and very small-capacity solar pumps, etc. So, that can be considered a part of the infrastructure and help us get those benefits for large-ticket projects. So, those regulatory enablement definitely are going to help.

In addition to this, of course, the regulator keeps refining the policies like the today's announcement on laws for the digital lending. This was an area of clarification, which was pending for some time, and now that it has come, hopefully, the fintechs or the startups with the partnership with NBFCs and banks will again start on this route. And that will also help bridge the last-mile lending problem for very short-ticket loans. There is a continuous dialogue, they continue to engage with us, we engage with them and whatever we need, we keep telling them. And generally, it's been evolving in a manner, which is representative of the central bank, which is conservative, cautious, and taking it forward. So as long as that happens, we are okay with that.

Sabharwal: First of all, I don't know — where is this arbitrage? Both sides feel that the other entity has the arbitrage. And I'm sure if we switch sides, we will still feel the same way. So that's human tendency. But I think what the regulator has done, and very sensibly, is try to classify companies into different categories, and made it more onerous for the bigger ones, which is good. I think what is very important is for the whole ecosystem to believe and feel that the system is stable, that companies are strong, that they have adequate controls in place, the governance levels are strong, and they can last for centuries. So that's the whole thought process.

And to that extent, we found these regulations pretty useful. Most of them we were anyway complying with. So it was not difficult to move in that direction, which would be true for any good company. It also has increased disclosure levels. And with listing happening, those will also become even more. So I think it's a positive thing. I think what is very important going forward is to look at how the banks and non-banks can move together to fulfill the larger ambition of India, of ensuring that credit is available to the last individual in the economy.

Sabharwal: Absolutely.

Tewari: So you're right, maybe around 10 years back, this was the conversation that will they take away all our business and in these three years, we have found that we are collaborating with quite a few fintechs in various aspects. For example, pooling of data of GST, PAN data, etc, which they are able to do in a very seamless manner. The players have already become embedded in our system. So, therefore, we no longer talk about them as fintechs or something — they are like partners to us, which should have been the original idea. And clearly they are much more nimble, their UI, UX is much superior, they are able to respond to the requirements of the customer in a much faster manner. So I now see us developing an API library where we are able to share our core APIs with fintechs as soon as we onboard them.

The onboarding process, of course, has to be a little bit detailed — we take care of the cyber risks, we take care of the scalability, we take care of the fact that the fintechs may have smaller teams and we do not want a situation where suddenly some fintech drops out and we don't know who will service that app or the application which was provided. So subject to these kinds of things, I am seeing a lot of collaboration happening. And I'm very hopeful that this partnership is going to really add real value to the customer, which is what all of us want.

Kumar: I think Yes Bank has been always very supportive of the partnership between the banks and the fintechs. And we have seen a huge advantage also. I think, only because of this collaboration. Today, we are almost contributing 40 percent to UPI, and UPI transactions are touching almost 10 billion a month and we are talking about 1 billion every day in the next three years. So I think this kind of partnership has actually helped both of them. And I think everybody has seen that it's not about each other, it's about how we can add value to the customer.

I think they have some huge strengths, which are not there in the banks. Because banks are heavily regulated entities, they have to focus on different kinds of things whereas their focus is on one problem statement. They pick up one problem statement, provide the solution. They are very innovative. And I think they are able to read the pulse of the customer much better than a bank. So I think those kinds of innovations when they are adopted in the bank, in that partnership, bring great value to the customer.

Krishan: Look at SBI’s YONO, for instance, just infusion of fintechs and so on so forth have made banks look so youthful. I think they've been tremendous. And I think we should celebrate it, including things like more recently CBDC. These are huge enablers for us. I think when we go forward, particularly when we talk about trade, I think two things, which in some ways stand out for me, based on the conversation really — first is going to be the focus on green financing. That really is a huge opportunity and as Zarin Daruwala said, we are just at the tip of the iceberg. There's a huge possibility out there for us, for the Indian banking system. And the second one, which again, while we are talking about a lot of consumer base growth is really the firing of the capital cycle. And while today we are talking about how we are serving the customer, the individual, we need the capital cycle revival and that is a big opportunity that lies ahead with all the digitisation with everything else.

Venkatramu: I'd like to just add one point about the collaboration of fintech and banks — one thing that we all need to understand is that the traditional technology that got applied to banking has no skin in the game as far as technology players are concerned. And what really benefited with the advent of fintechs coming in is that value creation and bringing about the consumer experience, and they having a skin in the game. So the way commercially benefited both the parties has actually disrupted the market.

Tewari: Another nuance on the CBDC — I think this is not really well recognised. I think in the interest of national security, CBDC is much needed for us to be sure that the UPI should stay safe. Something happens to UPI, we have the CBDC. So I think we should look at it that way and also encourage it so that it also comes up as a viable payment mechanism which is kind of a default vis-à-vis the UPI, so that's something I think we have not considered so far.

Tewari: So account aggregator clearly is one major disruptor. In my personal view, while that is the official policy, we have gone ahead with the open banking much ahead of any other developed economy. The UK is the only other name that comes to mind and we have seen what has happened in the UK. So it's kind of an unequal battle, where as a large bank, we are providing all of our data and we are not able to use all the other data, which is available, because the kind of products which are needed will take time to deliver.

Second, of course, is Open Credit Enablement Network (OCEN), which is still coming up. And as bank, we need to partner with that and see how we can deliver end to end digital solutions. So that the pickup is very quick. And we have done something in-house for our own customers, the digital lending on back of YONO, — four-clicks personal loans, which we have already delivered called pre-approved personal loans. And going further, the ONDC again, is a big opportunity because the banks have still not integrated into that system. We should be there on tap to fund whatever opportunity arises in the ONDC. So to my mind, these are the three big opportunities in terms of disruption, but both disruption and opportunity always go together.

Daruwala: CBDC may have its own niche. So, you can have a very specific kind of way you can use CBDC. For example, suppose you want to do DBT and you want finite-end use of that DBT or you want to give a food coupon and have an expiry date, CBDC will enable you to do very specific kind of use — even more effective targeting. So UPI, while it's a great payment mechanism, CBDC can have very targeted end use, end date, end expiry. And to my mind, that will evolve the way UPI has evolved. Of course, CBDC — I think the adoption will be a struggle because people are so used to UPI.

Daruwala: CBDC is a great tool to use for a very targeted use. end date, end expiry. whatever — you can customise it. So that's the play that I see. Of course, a lot has been talked about the metaverse, but we have to see how it evolves. But our own bank in Hong Kong has bought land in the metaverse and our Hong Kong office is working on co-creation.

Tewari: Not at the moment.

Shaparia: I think these things we talked about — account aggregator, OCEN, etc — are going to be disruptors, but I think what is going to be even more important is that it cannot be that only the financial sector part does its job, but we need the financial sector to support our clients to do their workflows better, to get them connected to their ecosystem better and I think time will come when we will be tasked not only with providing the financial part of it, but also help them through our connection via with fintechs, etc,. to offer full workflow solutions.

I think workflow solution is going to be the next real mantra, which is going to come out in a big way. So we cannot only stop by having a very smooth payment, if you go and talk to a customer, payment or receipt is at the end of his value chain. But what about the various things he has to do before that and after that? So I think we need to — in our industry — really find solutions for our customers. And I think some of us who will do that more will probably see clients really very keen to solve that.

Singh: So I may be talking a little differently and it is not financial services. From hardcore experience, what's more important to me and what will make a big difference is the quality of health and education in rural India and semi-urban India, because we have seen a lot of mushrooming of all these things, but the quality has not improved to the extent it should have. We are seeing a lot of digital infrastructure and physical infrastructure that has actually significantly changed in rural India, but these two things, coupled with skill-development, skill-education, will be a big game changer.

Parthasarathy: I think from a disruption perspective, I definitely feel open banking and generative AI will be the two top disruptors for just not financial services, but also manufacturing for financial services, banking, and retail, FMCG, etc. You really need to get that all going.