(We present here the edited version of the valedictory CEO panel discussion at FIBAC 2018. A detailed report on FIBAC 2018 was published in our October 2018 issue -Ed.)

Yashraj Erande (Boston Consulting Group): Mr Mehta if I could start by posing an open question to you as you do crystal ball gazing about the next decade, how do you think Indian financial services landscape is going to change and what do you think are the key priorities?

Sunil Mehta (MD and CEO, Punjab National Bank & now Chairman IBA): The question raised by you is very relevant. The future of banking is going to be much different than what it is today; the banking has already undergone a major transformation. We started with term lending institutions like IDBI, ICICI; then there are public sector banks, universal banks, then there were regional rural banks, land development banks. The model is now changing, the new generation bank, especially the transaction-based banking has already started, payment banks have also come into operation, small finance banks have also come into operation.

What I could foresee from the changing landscape of the banking is that the future of banking may be around 4 or 5 major banks operating in the country for providing universal banking. Then there will be differentiated banks; some banks specialising in MSME lending, some banks specialising in retail lending, some banks specialising in agriculture lending and so on. There will be transaction-based banking like payment banks; there will be service providers utility-based banking, some banks providing special services like locker facilities and all different type of other ancillary services. So there will be product specialisation. With the increase of access to the internet and transaction banking, the landscape of banking will change from brick and mortar to the hybrid initially and virtual in the long term.

The footfalls are going to go down substantially in times to come, so differentiated banks will also be having hybrid structures and many of them, depending upon the product they have, may have a different structure. A few banks will have a brick and mortar structure where there is going to be mortgage-based activities and all that, and the few will be just virtual banks.

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