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

Saurabh Tripathi (Boston Consulting Group): The penetration of banking in India is a case study for the World Bank - within four years our coverage of population went up from 40 percent to 85 percent, which must be the fastest ever coverage of banking achieved in any country in the world. Almost 63 percent PMJDY accounts are active. For 60 million SMEs in the country, we have got 77 million current accounts. Immediately after demonetisation, the number of current accounts increased by 21 percent; it is important to note that 40 percent of these current accounts are active on internet banking.
Also, in the last four years, the cost of data has gone down. From being the costliest in the world, it is the lowest cost in the world now. This has preponed India’s digitisation by three years. Look at the number of data sources which are already available from where we can pull data electronically about customers, it goes from the data stored at your mobile phone all the way to your tax data to of course bureau utilities and so on. Now bureau pull for SME customer is a 40-page file. It talks about everything that this customer has done in the past. So this puts a huge imperative on financial institutions to think about one new capability which I I don’t believe is fully ready in India.
Fintechs are sometimes considered as competitors to banks, but our experience is that they are all there to support banks in various elements to give one small capability here and another small capability there and pull it all together to create processes which are seamless. We are noticing that this is how traditional credit was done, audited financials were a big deal in terms of assessing credit risk, and it is changing now to analysing your account operations. Many also believe that digital transactions reduce cost. Actually, digital transactions create information based on which credit will be done which was one of the premises of Jan Dhan Yojana also that Jan Dhan will open the accounts for people and an overdraft will be given on the basis of transactions. Yes, it was a bit early to have set that ambition, but it is now time to think about it in a very meaningful way.
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