New Delhi (NVI): There is enough cash available in the banking system and it is now for the industry to take advantage of this, SBI Chairman Rajnish Kumar said today.
Speaking at the 92nd Annual Convention of FICCI– ‘India: Roadmap to a $5 Trillion Economy’, Kumar said there is no problem of liquidity or availability of the funds with the banking system but the banking system today is more cautious than what it used to be.
“Currently three sectors, solar, city gas projects and roads, are seeing demand for credit,” he said.
On the issue of loan monitoring, Kumar said that the method of lending itself would need to undergo a change.
“Asset-based lending will continue to work for term loans but for working capital, we will have to move to cash flow-based lending,” he said.
Commenting on the issue of interest rates, he said that in banking system, dependence for borrowing in India is largely depositors.
“We can’t lower the interest rates without lowering the interest rate for depositors and there is a threshold below which we cannot reduce the interest rate for deposits,” he added.
FICCI President Sandip Somany said the global economy is going through a phase of synchronised slowdown and more than 90% of the world will see a reduction in growth in the year 2019.
“To boost consumption, support has been given to NBFCs and HFCs to improve retail credit, payments that have been held up in the government system are being expedited,” he said.
“The banking system itself is changing at an unprecedented pace given the advent of technology. Digitisation is the new mantra and data is the new source of revenue. Digital financial inclusion is now in vogue and the partnerships being worked out between banks and fintechs are yielding some very good results,” he added.
