Innholdsfortegnelse for 21-Mar-21 i Business Today

The jury is out on whether the bank of the future will be a bank as we know it or the business of banking would be hijacked by a tech firm like WhatsApp, Google or Apple! After all, banking today is more about technology than about handling money. Curiously, even the latter is managed — by technology. Both sides are readying their armoury and neither is short on ambition. Banks are adopting technology at an unprecedented pace and tech firms have already made forays into payments. That provides them the customer data to cross-sell other banking and finance products to the customer in the future — anything from personal and auto loans to insurance and pension products. Whether banks will pivot to resemble tech firms or tech firms will resemble…

The numbers are staggering. In the next three years, the proposed Development Finance Institution (DFI) could have a lending portfolio of ₹ 5 lakh crore, while the asset reconstruction company (ARC) for bad loans would have acquired ₹ 3-4 lakh crore stressed loans from banks, releasing huge capital for banking sector expansion. That’s not all. We might also get a few more banks, possibly a big corporate-backed bank or a large NBFC converting itself into a bank. Then there is acceleration of technology adoption by banks, NBFCs and Fintechs. The government, too, has again taken up the pending proposals for privatisation of public sector banks (PSBs). The ₹180 lakh crore banking industry’s ‘great reset’ is well in progress after the Covid-19 outbreak that made banks trigger business continuity plans and…

1.23% Net NPA ratio in Q3 FY21, down 142 bps year-on-year 7.6% Year-on-year credit growth in Q3 FY21 A week ago, Dinesh Kumar Khara, 59, the new Chairman of India’s largest bank, State Bank of India (SBI), had said the ‘elephant is ready to dance’. Khara’s optimism shows up in the bank’s stock market performance where its share price doubled since he took charge in October 2020. The reasons are a greater control over asset quality deterioration, robust base of low-cost deposits, retail banking acceleration in mortgages and institutional setup for housing loans gone bad and financing long-term infrastructure projects. Also, the bank’s subsidiaries are already firing on all cylinders. Be it SBI Cards or SBI Life, the higher market valuations indicate the future scalingup of these businesses. In the…

Five years since it started operations as a commercial bank, Bandhan Bank is all set to shed its microfinance-lender tag. It is not just focussing on geographical diversification, but also expanding its loan book across housing (affordable housing finance firm Gruh Finance merged with Bandhan in October 2019) and high-margin personal, gold and SME loans. It also plans to offer insurance and mutual fund services, albeit through a holding company. Away from the din of Mumbai, where most financial institutions are based, Bandhan Bank MD and CEO Chandra Shekhar Ghosh operates out of Kolkata. Despite diversification, he wants to stick to the core, of serving rural India. “Earlier nobody trusted us with their deposits. But, within five years, ₹71,000-crore deposits have come to the bank from 2.5-crore customers. The loan…

Small is beautiful, but could it prove to be a constraint for innovation? Ujjivan Small Finance Bank has proved it otherwise, by winning the Jury Award for the Best Small Finance Bank, based on qualitative parameters like Innovation, Talent and Workforce and Business Resilience. The bank has gone completely digital on the customer acquisition front and offers services in language of choice, thereby fetching the highest score on innovation. “We have very little dependence on paper. All our processes across liabilities and assets were completely digital by second quarter of the current fiscal,” says Nitin Chugh, Managing Director & CEO, Ujjivan Small Finance Bank. As an SFB, it caters to small borrowers and depositors. “So, it is important to keep operating expenses low and be reasonably profitable too. As such,…

120 Client additions in 2020 from 40 pre-Covid Largely operating in the travel segment, Covid-19 came as a blow to payment solutions platform PayMate. With a steep fall in business despite a pick-up in digital payments across the country, the B2B payments player shifted gears immediately. The company expanded its reach across sectors such as manufacturing, FMCG, logistics, pharma and BFSI. Marquee names such as Marico, Kansai Nerolac, Amul and SBI Card came on-board. From 40 enterprises pre-Covid, the number increased to 120. Added to the supplier and distributor network, the client figure is currently above 55,000. “We had a great pipeline of customers to come on-board pre-Covid, but the pandemic disrupted it all. There was obviously a steep fall, but we soldiered on. Luckily, big names came on-board and…

There is a good chance that 2021 will be remembered as the year the world picked itself up after Covid-19. In particular, the banking sector was forced to make years’ worth of technology and business model changes in a matter of months. In India, since the nationalisation of banks, the banking sector has evolved significantly. A strong banking sector has been instrumental in India’s growth over the years. However, the sector has been laden with high NPA levels. The introduction of the Insolvency and Bankruptcy Code (IBC) helped create a better resolution mechanism for large NPA situations. The retail banking sector, though less impacted by the non-performing loans situation, was hit by Covid-19 to some extent. However, relief packages and regulatory measures announced by the government did support the sector…

Had Amit Sharma, Founder and CEO of ShopX, not been running one of the country's leading FMCG distribution platforms, he would probably have been teaching physics, his passion since high school. “I used to take special permission to go to the IIT Delhi library to read research papers,” says Sharma. His passion enables him to come up with better solutions. “In business, we tend to learn a lot by analogy. When you have little bit of a science mindset, instead of analogy, the question you are asking is what are the fundamental principles revolving around the problem you are trying to solve?” In the world of FMCG distribution, offering credit to retailers is a common practice. Instead of doling out credit, Sharma felt it would be better to help retailers…

INCREASE IN HOLDINGS Pledged shares as % of total promoter holding Number of companies with 25-100% pledged shares ₹1.8 Lakh Crore Value of promoter pledged holdings at the end of Dec 2020, about 1.04 per cent of the total market cap of BSE-500 companies WHO PLEDGED HOW MUCH Companies with highest pledged holdings by promoters as percentage of their holdings HIGHEST PLEDGE IN OVERALL HOLDINGS Companies with highest pledged holdings by promoters as a proportion of total shares COMPANIES IN WHICH PROMOTERS INCREASED THEIR PLEDGED HOLDINGS % of promoter pledged holding (Change in %) TOP 10 COMPANIES IN WHICH PROMOTERS REDUCED THEIR PLEDGED HOLDINGS % of promoter pledged holding (Change in %)…

When 60-year-old Sandeep Bakhshi was pulled out from ICICI Prudential in early 2018 and asked to head ICICI Bank, the country’s second-largest private sector bank was facing multiple challenges. One was instability due to the exit of Chanda Kochhar. Second was high level of non-performing assets or NPAs. Bakhshi, who grew up in a defence family, hopping from one school to another, was quick to adapt to the situation. In a little over two years, he has delivered results. Return on assets has jumped from 0.43 per cent to 1.70 per cent. Net non-performing assets (NPAs) are down from 3.65 per cent to 0.63 per cent with substantial NPA provisioning. Capital adequacy is close to 20 per cent as against 9 per cent mandated by the Reserve Bank of India.…

Fifty five-year-old Sashi Jagdishan is not the one to go with the usual flow. He had keen interest in medicine, but ended up studying physics to make a career in electronics. And when his father's close friend, a finance director in a multinational company, advised young Jagdishan about the great opportunity in the field of finance, the latter picked up chartered accountancy. But instead of joining any of the Big Four or making a career in auditing or taxation, he joined Deutsche Bank. Within three years, Jagdishan sacrificed all the perks of the MNC job to join HDFC Bank, then a start-up bank, in a public sector-dominated banking industry. “What, you are joining a government bank?”, was his wife’s response. The rest, as they say, is history. It’s been a…

At a time when any reference to Indian banking conjures up images of spiralling non-performing assets (NPAs) that most large players have been grappling with for years, the new-breed Utkarsh Small Finance Bank (Utkarsh SFB) has been able to maintain top-notch asset quality. This is one reason it has emerged as the Best Bank in the Small Finance Bank (SFB) category, introduced for the first time. Despite being sixth in capital adequacy, fourth in growth and fifth in size in its category, Utkarsh SFB was at the top of the heap in Quality of Assets, measured by 10 sub-parameters, in the quantitative study for FY20. In Quality of Earnings, it got the second rank, while in productivity and efficiency, it was third among SFBs. The seeds for high asset quality were…

75% Growth in deposits in last one year The bank that has a strong client selection culture but follows the client even when he expands operations to another country has been adjudged the Best Foreign Bank in India in the Large Foreign Banks category in the annual BT-KPMG Best Banks Study for 2019-20. Bank of America (BofA), despite being sixth in size, has topped in growth in advances and deposits. However, it ranks lower on other broad srength analysis parameters — it is second in capital adequacy, fourth in quality of earnings and eighth in quality of assets. “Of course, we are not as big as the others (foreign retail banks), but we have been growing steadily. Our balance sheet has been growing between 34 per cent and 42 per…

For serial entrepreneur Bhavin Turakhia, the vision while setting up Zeta was very clear. “We started with the notional objective of being a globally disruptive and dominant player in three buckets, with focus on banking, payments and commerce. Our goal is to provide the most-outstanding experience from a banking and payments standpoint and create unique experiences for commerce — buying/selling goods for customers, merchants, companies, employees and banks,” says Turakhia. Co- founders Turakhia and Ramakrishna Gaddipati started their Fintech journey with ‘Zeta Tax Benefits’ in 2016, a Cloud-based enterprise benefits suite, which digitises meal vouchers, fuel and communications cards, medical reimbursements, gadget cards, gift cards and LTA cards. There was also Zeta Express for cashless transactions at corporate cafeterias, for which the company initially roped in Sodexo, RBL Bank, IDFC…

The government has consolidated public sector banks, where the number of PSBs has reduced to 12 in 2020 from 27 in 2017. In the new landscape, the six consolidated PSBs will compete with large private banks in terms of technology, product range and consumer reach. This reaffirms the government’s decision of owning a select few entities under the new privatisation policy. Further, we have seen regulators having an open mind about resolving stressed bank situations as demonstrated by the recent sale of an old private sector bank to a Singapore-based foreign bank and a Canada-based holding company’s acquisition of majority stake in an Indian private sector bank. The report of the RBI’s internal working group to review ownership guidelines and corporate structure for private banks has added an interesting dimension…

Presenting Sponsor As the the Indian economy begins to pick up after a year, there is a great rush to woo investments. Every state is competing with the others to woo investments. Greenfield investments are vital to create jobs in the states. And some states are better at attracting investments than others. The government of Tamil Nadu plans to attract investments worth ₹10 lakh crore and create employment opportunities for 20 lakh people over the next four years, Tamil Nadu Chief Minister Edappadi K. Palaniswami said. Speaking after giving away the Business Today Business Leaders of the State (BLoS) awards in Chennai on February 16, the chief minister announced two policies — The New Industrial Policy 2021 and Micro, Small and Medium Enterprises (MSME) Policy 2021 — to help achieve this…

Q. What was the problem you were grappling with? A. It was early in my career and I had just joined TCS after working in smaller group companies. In the first few months, I noted down a list of problems that I was facing in TCS. You can imagine a young guy with all the cribs… Q. Who did you approach and why? A. I went to Chandra (N. Chandrasekaran, Chairman of Tata Sons), who was the reporting head. Q. What was the best advice you ever received? A. I still remember, he went to the board and drew a circle and said, first you've got to make up your mind — ‘are you in’ or ‘are you out’. If you are inside you better deal with what is inside,…

↘ Vehicle registrations fell 9.7 per cent in January, according to data from the Vahan portal ↘ The reasons included poor availability of vehicles due to scarcity of semiconductors, fading pent-up demand and recent price hikes ↘ Passenger vehicle (PV) registrations witnessed a decline of 4.5 per cent to 2,81,666 units; twowheeler registration fell 8.78 per cent to 11,63,322 units. Commercial vehicle registrations dipped 25 per cent to 55,835 units Rounded off; In '000; Source: VAHAN…

Adecade ago, Aditya Puri, the former MD of HDFC Bank, tried to influence his daughter Amrita Puri to join advertising against her desire to pursue acting. Though he managed to convince her, she did not enjoy advertising and opted for acting. Puri’s daughter, who acted in movies like Kai Po Che and Aisha is making a career in Bollywood and serials. Today, Aditya Puri brims with pride over her achievements. This has parallels with Puri’s life. In a banking career spanning 40 years, he never allowed himself to be influenced by anyone. Puri, who built HDFC Bank from scratch, opted to graduate in Commerce, though his father, an Indian Air Force officer, wanted him to study science. After completing his chartered accountancy in Delhi, he shifted to Mumbai in 1975…

If you hit the road, you are bound to come across sign boards ‘cautioning’ you about the coming danger. But for Federal Bank, ‘caution’ in lending and managing deposits is the watch word from the word ‘go’. That is one reason the old private sector bank has emerged as the Best Bank in Mid-sized Category in the BT-KPMG Best Banks Study for 2019/20. Despite being fifth in size, the bank has got the top slot in the category of banks with balance sheet of between ₹1-3 lakh crore by topping on parameters such as growth, quality of assets, quality of earnings and capital adequacy. The bank crossed the ₹1.80 lakh-crore balance sheet size in FY20, a 13 per cent growth year-on-year. “Banking is not a one-day game. You don’t do…

TACHYON A Cloud-based full stack, API-ready neo-banking solutions platform providing modular credit, debit, prepaid and loan processing with integrated mobile app FUSION An API-based Platform-as-a-Service (PaaS) offering, which helps Fintechs build and manage products through seamless integration with banks, payment networks, card printers, push servers etc ELECTRON A suite of solutions sold via banks to enterprises, which include employee benefit solutions, corporate gifting and rewards & recognition for enterprise payments…

Bank Of The Year The jury also analysed qualitative inputs to decide the winner; figures in % Best PSBs The jury also analysed qualitative inputs to decide the winner; All figures in %; shortlist based on KPMG study and jury discussion Lifetime Achievement Award Banks–Best In Innovation Banks–Best in Talent & Workforce Management Banks–Best Enterprise Resilience Banks–Best In Fintech Engagement Small Finance Banks–Best on Qualitative Parameters Fintechs–Best in Payments Fintechs–Best in Value Added Services Shortlist based on jury discussion and KPMG rankings…

N.K. Singh has worn many hats in his career. After retiring as a civil servant, he had his brush with politics — first as a Rajya Sabha member for the Janta Dal, and then as a member of the BJP since 2014. He has also been the chairman of the 15th Finance Commission. While he shuttled between roles, he managed to balance a very demanding professional career with the pursuit of some of his passions — classical music being one of them. His love for classical music dates back to his childhood days in Patna, a city which used to host iconic public performances of classical musicians. His earliest encounter with classical music was listening to the sarod recital of Ustad Ali Akbar Khan, accompanied on the tabla by Kishan…