Sign Maryland Banking Claim Later

Industry sign banking maryland claim later

rbi numbers and that's why you have seen a reaction from number of banks and financial institutions where they have gone and raised confidence capital or called it backstop capital to ensure that they can come out of this crisis stronger rather than bruised and battered the good news is that we have gone through two phases of concessions being given to borrowers morat moratorium one moratorium two and now we are in the so-called restructuring phase the numbers are trending in the right direction that means the customers realize they don't need to pay many customers who had taken moratorium or who are worried about what this crisis could mean to them have actually started paying and i'm expecting a similar trend to continue on the restructuring side uh you might also see a very clear trend where some banks take it on their chin and actually allow some of the borrowers to go into npl because they might have reached a situation where they just cannot survive this crisis and you will see that across the wholesale and the retail portfolio i was seeing a study the other day where almost 10 percent amongst i think thousand respondents 10 percent of the people who lost their jobs 45 of the people have seen a 10 percent cut in their salary and so on and so forth so there is an impact at the individual level there is an impact at the sme level partly held by the government guarantee scheme and and there is impact at the wholesale level yes the economy has been used and battered yes the borrowers will also suffer and suffer significantly through this crisis i do believe that institutions who are strong have already gone and raised capital so they will come out of this crisis stronger but that will also mean that institutions who struggle to raise capital or who are not able to get enough financing from uh you know friendly banks or the government at the right time will struggle and struggle for a long period of time because please realize that the only option they might have left is to use the restructuring as a mechanism to kick the can down the road but kicking the can down the road does not mean that the problems go away they actually magnify over a period of time so you will have a certain set of institutions which will struggle through that i do want to say that the rbi and government is trying is level best given the limited resources they have to continue to push everything in the right direction uh they have been quite proactive but it is a severe and a very large crisis so let's see we'll tell what happens okay before i get mr ghost to comment on what you just said let me get a quick following question from you because you talked about confidence capital and we've seen a whole host of banks including yours uh attack the markets to raise funds are you done for now or do you believe that more will need to be done given what you're uh being able to see in terms of the possibility of nps no i think we never needed the capital but it was a very important signal to give to the market and the investors and the depositors at large that we have the ability to raise capital even during the time of crisis we have uh permission and approvals from our board and shareholders to raise up to fifteen thousand we've raised ten if the right investor with the right price right structure was to come along we might look at raising further capital but that again will continue to add to our confidence and continue to add to our capital ratios we do believe very strongly that all this capital will be used for growth when the growth comes back and people are talking about growth coming back in the second or the third quarter of next year so they're saying maybe even beyond that but does not matter during this prices the people who are the capital will find their policies to grow you might grow at a slow rate but the apologies to grow will remain and we will go and capitalize on them okay uh so that that window is uh is open and you may exercise that choice uh windows should always be open in this claim of crisis yes the window will always be open mr gosh let me ask you sir and just to pick up on now what club said in terms of this the similarity of this crisis now given what you ask me we are unlocking this open time what would you like to see in terms of the delinquency rates what are you already seeing on the ground today uh the crisis always is given the opportunities for uh banking industry if you go to the 1991 uh that is also we have been seen that after that it has a economic growth if you recall on that 2008 lehman brothers after that also economic growth has come very high i hope that this is the right time also to take the opportunities what is the opportunities in indian banking industry is it a need or that the outside reform of the banking industry or inside reform inside reform means the bank inside will be like to deform not only concentrated for the corporate or the urban and metro they will come to this the retail market and reach to the unbanked the the site which is rural and senior versus a unlimited number of credit opportunities in there so until the banking industry in this the crisis are not the reform their internal model to reach the more new customers there is a challenge to on the basis of existing customer to grow in that much on this so that's the one if you see that go to this rural india on that there is a demand the consumer demand is a coming now and the pressure cooker now they are asking the demand open they are asking that means they have the money but they are not getting the banking services without banking services they are growing this so if the banking services is like to reach on that so these people are taking the credit from the banking services their income will be increased that much but only keep in mind on that the lending to these rural people is not the charitable job small ticket size of the loan given to the people not in the charitable job that mind will be changed from the regulated government and and in general public so then the reform of the new banking system will be reach more people and unlimited both can be done on that so let me ask you this sir because you talked about how banks of course while we talk about regulatory reform for the financial sector uh in general but you're talking about how each individual bank will need to assess its future course of strategy uh now two questions what are you intending to do uh you know in terms of offering this differentiated product to reach out to customers that other banks may not necessarily have to work with all uh or uh the ability to reach out to and secondly i remember mr johnson on one of our earlier programs that spoken about how this crisis is different because uh this time around the retail book is probably going to be more severely hit how are you seeing that uh do you believe that that would be true if i see the one point on that the demand is a little bit the slow in the in the rule and it will be taken some time to pick up on that and uh and so that this is the one side but every time credit growth is coming on the basis of uh the from the from the time of the puja when the puja will come then then the credit growth will be start on that okay but in this time we have not seen that much growth is coming on that but it will be puja also deferred the one month delay so that may be the uh that the demand will become uh after the one or two weeks later on that this is the one one side of that what is the other question my other question was how do you intend to reach out to uh this new customer that you always believe that you know it's going to be an opportunity area for a bank specifically like yours uh how what is going to is there going to be a change in strategy for you specifically no yeah it's a change on that it is a if you see that the new customer it is the lies in the rural area rural and semi-around so rural and semi-urban if we like to reach so whatever the existing banking industry recruited the people from mba institution it cannot help to the bank to reach to the rural course of the people they have a need in that separate caddor should be developed recruit for the local and the small education because when you go to the more rural they have not in the multiple types of transaction growing in the bank in the bank on the deposit money withdraw money or maximum is a transfer the money for that reason the simple graduate people if if that can be like to develop the banking skill how they can be operate in a banking so that can be helped on that to reach to the new customers and educate them and they will come out from the existing money lenders who are traditionally paying very high interest to them absolutely need to on that the rural people you if you another another thing i have been also mentioned other uh of the meeting that uh whatever that the national skill development program if a national skill development program can link with the rural uh people developed for banking services very simple way that can be helped on that to build up the new skill who can be run in the rural bank branch and unbanked people or underbanked people will get the service from them that's an important point that you're mentioning them is devotion you're talking about the entire talent pipeline also being geared differently to be able to address uh the rural uh consumer but uh mr conor let me ask you sir is the worst behind uh the nbfc sector at least as far as liquidity is concerned that is what one hears uh from most people that the situation has gotten significantly better but what about demand what about delinquencies how are you coping with it no i think that basically you know the financial sector or the reform which i carry down in the financial sector is important but at the same time i think the issues of the real sector is more important because if you address the financial sector and if you do not address the real sector it is like putting the car before the horse so their part is not going to move at present the issue is of the real sector last couple of years we have seen that there has been a slowdown in the economy which has got compounded with this covered pandemic so therefore i think that what is important is to see that how do we address the issues of the real sector except in technology pharmaceutical food industry all the industries many of the industries had already slowed down which have got compounded now so i think that what is required is for the government to be in a position to address these issues at the real sector because then only at the financial sector level whatever restructuring is being done if they are not right with the real sector it is going to be very short-lived because it will be you know in a short period of time we will again have a problem because the companies will again go into uh into liquidity shoes or will become an npl and we have seen in many of the industries that one after the other companies have become nps not only because of the problems which they have but because of the macro level problem because at the micro level also and especially in infrastructure i can say that there are problems multiple problems in almost the sector of infrastructure which have not yet been addressed so therefore the liquidity for the nbfcs cannot be sorted out besides the fact those nbfcs who and retail financing and all it is fine but companies which are involved or engaged in financing of msmes or in the real sector primarily in infrastructure for them there would be issues until the real sector problems are addressed and i think that that is where the government needs to direct their attention this 20 lakh stimulus package which has come also it has been basically given through the banks but what has to be addressed is the real sector first i think that is where we should be so the horse has to be put before the car so when you talk about the government needing to uh focus its attention on the real sector what is the single biggest ask are you saying that the government needs to put more money in by way of stimulus because so far uh you know there seems to be a genuine apprehension uh with within the minds of the policy makers on whether this is the time to spend uh how much to spend it is a separate matter altogether but is this the time to spend and the voices from industry continue to believe that this is the time to spend don't wait for the patient to get to the icu before you spend more so what's your view well i think the patient is already in the icu now we don't want the patient to go to the mall so therefore this is the right time to spend and also it is not only spending but wise expenditure is required so 20 lakh stimulus packages so that if if if it was 20 000 crore and more effective industry wise it would have the desired effect but unfortunately we have spent 20 lakh crore or the government announced the package but we have not seen the desired effect because of a person has a headache you give up give him the medicine for the head you don't you know put the entire body into surgery and start opening up everything because it is not going to make any effect so therefore i think that what is required is in each of these sectors the amount which has to be spent i don't think what is very large neither small amounts it has to be spent but it has to be effective so therefore each sector is one of the different problems so those need to be addressed the tourism sector has some problems which is different therefore that has to be addressed accordingly you can't have one medicine for all diseases so there's no punish there and that is what the realization has to be so i think that it has to be more prudent expenditure we are not a rich country like the u.s or europe we can have billions and billions of uh dollars put in this package we have to spend wisely yes we have to spend wisely you know what we're seeing the world over at this point in time which is different from what india is doing is for instance the nationalization of payrolls because the government is essentially coming in with salaries we haven't seen happen here in india so if i were to ask you to list out what do you believe is the next set of measures that you expect from the government to actually be able to alleviate in mr conomiere's words uh you know get the patient to at least move out of the icu and not get to board well obviously you know as people from the industry would expect the government to do as much as possible and as quickly as possible i think when the government announced its package it became very clear it will be into three kind of buckets one was to hope the people who really needed it which was obviously the poor the migrants and all of that second was to help burn specific or you know help the overall economy through the financial sector by giving refinancing and third was yes help the industry through moratorium and and stuff like that i i don't think the government ever and then they talked about the long-term reforms which will hopefully have the economy i think government was very clear from the beginning will be very difficult for them to help any specific industry sector my view is that given the limited resources government can do a couple of things one is it can continue on its agenda of supporting specific industries through not dole outs but specific measures which might give them some breathing room second government can yes spend money for the country itself so you know there is a huge gap on the infrastructure side that can be upfront uh the problem is that invariably our infrastructure spending takes a lot of time because of land acquisition issues environmental issues and all that so not only is about the question of spending but it is ensuring that that spending happens and also ensure that the state governments do the same thing in their own way and the government supports that particular measure i am quite concerned and worried that government is i know there's a lot of talk that government is not going to come out with any package which will be doling out money to a specific sector i don't think they as a concept they don't like it because then kind of you know it puts them under scrutiny on why it has been done for a articular sector because the entire economy is suffering so why one sector and the moment you start doing for the entire economy it becomes difficult you talked about specific support to individuals while i think the government is trying to do that to the poorest sections of the society through various schemes they have will they provide some kind of salary support uh well they're trying to do that through various schemes by giving them some leeway i do not expect this to change i think somewhere government is also quite clear i'll bear a little bit of the hit individuals have to you know bear a little bit of the hit and the conflicts have to be a little bit ourselves and i think and that's why this push on opening the economy as quickly as possible they are hoping that the economy opens up some of these problems will get elevated so while i would love to give a laundry list my viewer is we know it's not coming we know that movement is only going to do that much so we might as well focus on what we can do to ensure that we survive in the long run yeah and and so all the sectors of the economy where money is needed they should be looking to raise equity maybe even at cheaper prices in the industry because government is not coming with cheaper equity for you you know so i think we need to accept that and then who found on that basis uh that we have from the government and i think the government has made it clear that it can only go this far not further given its physical constraints but mr ghosh let me pick up on what uh uh mr chaudhary said and we've also got a question coming in from rajesh you know he said look we need to acknowledge the fact that the government's hands are tied beyond the point and we have to help ourselves so what is it that the banking sector can do uh to aid group that's the question that's coming from rajasthan banking sector uh the can do yes uh mentioned about some of the things on that so banking sector is a very challenging in this time uh why is he say that one side the banking is they are taking the deposit from the customer or lending to the borrower and collect from the borrower and pay the interest to the depositor but depositors say that my interest reduced i cannot survive and what would say that my interest rate is high i cannot repay so balancing with both both who are given the guideline how we can be maintained in these the two type of customers of the interest and survive a bank on that so if i say that another way i've been i've been not talking to the big uh already you know that the uh three lakh pros have been already packaged as given by the government i can put this to the very small ticket size of borrower if i say that this the borrower what is their need their need now is a liquidity support to them yeah so for total country there is a six core borrower that means the six crore family i say that at if a government in this time gave the liquidity support 10 000 rupees per family in their account irrespective of bank mfi whatever they are not given the money to them and that money they will be give to this customer don't need on that they will give directly to their account 10 000 rupees and interest rate i suggested on that the 4.5 percent report and five percent is an expenditure cost of the operation if i say that the nine or nine point two five can be charged and mui or bank collect this money after the six months started that money collected and returned back to the government of this money and with the government are taking the five percent or maximum is the 10 percent risk taken on that so government loss is a 3 000 crores and released to the six crores family and liquidity given the sixty thousand crores to them it's a big way they can be held on so not as a charity but it isn't way off that recovered from this type of crisis by this poor family on that i think that's an interesting idea i don't know if anyone in government is uh is biting the weight off on that one at least as far as the opposition is concerned many people like the pogba finance minister suggested that there be a 10 000 rupee uh sort of infusion into bank accounts but you're talking about the ability for these households to pay that back so it's not going to be necessarily seen as as a dole uh if i could call it that but listen uh let me uh come to you with uh with a question that's coming from one of our uh uh one of our uh viewers that dr raman agarwala is saying when will the banking and finance sector become you've just seen the government announced another 20 000 for which is uh as far as vcap uh uh for public sector banks of themselves do you believe the only way possible is for psg to reduce government shareholding uh is that the best way to move towards afternoon no i don't think so that you know just that the government if they reduce their stake in the psp that will make the banking sector or the financial sector i think it is two rational decisions on policies have to be taken because if you have if the real sector doesn't do well i'm going back again to the real sector then you keep on you can keep on state of npls which will be there in the banking sector every year and every every year the government or the private sector banks the private sector banks can raise money internationally and from the domestic investors so continuously they will keep on raising equity but that is not the solution you keep on moving equity in the financial sector whether it be banks or it be nbfcs you know you can do it endlessly but therefore where the problem is it needs to be addressed and i totally agree that you know the government we cannot expect the government they do not have that kind of resources as the us or europe that they will be in a position to roll out money to industries and specific sectors but they need to just do some tweaking to see where the problem is i'll give you one example let's suppose that today all the companies in the infrastructure space especially the construction companies and the contractors because we are financing them they are having severe problem now what is their problem they don't need any rule they have two problems the the what needs to be tweaked is and the problem is that their money is stuck up with the government they dispute for years together they have arbitration awards which are corrodes and crores of money so almost about one to eight lakh is behind the government by way of awards and disputes if they just sort that out that six lakh crores come into the construction industry it is not a role it is their due event that comes in you just imagine although in all the companies they revive they are able to pay back to their bankers the bankers don't have an npr so it has a cascading effect so that's why i said that each of the sectors the government needs to invest hardly instead of 20 lakh crore if it was 20 000 crore package well thought through i think it would have had the desired effect so that is the problem which is there so each of these sectors six lakh crore now the government said i won't have money that also there's a very simple solution the government can issue bonds so therefore if their government wants they can be placed with the bankers at least that companies problem is elevated because the company on the liability side they have a loan on the asset side they have huge debtors from the government so they have the wants which can be given to the to the banks and as it is the banks are required to invest in slr and government securities so it sorts every all the problems without any money so i think that a lot of solutions which can be provided which is without investing money or rolling out money but it is important to address those issues today you see we are wanting manufacturing companies to come manufacturing uh to be basically revived and manufacturing companies to come in but to set up an industry if you ask anyone it's basically mind-boggling task and i think when my customers come to me especially in the infrastructure if they have completed a project on time i am ready to recommend them nominate them for the nobel prize yes absolutely a nobel prize for for ensuring that there is no cost overrun or time overrun something uh yes you bring up very valid points with the conor i mean dispute resolution i can't remember how many years we've been talking about the same issue over and over again and and yet we're continuing to have the the very same conversation but amitabh chaudhary on the larger issue of uh of banking and you know in india we continue to be driven by public sector banks uh and the expectation is that uh or at least the hope uh in in the minds of investors and those who've been looking at india's banking sector for a long time people like the former rbi governor raghuram raja who's just written a fresh paper on the need for bank reforms uh do you really believe that where we're at that inflection point where we will see uh a move towards government holding being reduced in public sector banks will that make a difference at this point in time uh is the time right for that so you know the government uh there are two things which are being talked about one is that the government has to reduce overall shareholding they've talked about it and they also talk about consolidation of banks so that hopefully consolidated banks can be more stronger and can manage through the crisis much better what government has been doing is reducing its shareholding but otherwise at least from outside it appears there's a very little change that has happened in the way the public sector banks function and please i'm not criticizing how they function i'm just saying that just by reducing shareholding there has been per se no change in how they work how government influences them and what sort of things uh you know they kind of they have to carry the government doesn't have because ultimately government is the owner of those banks so if we want to if we believe that there are some changes required to the way the psb's function then we have to do it whole hog just reducing payrolling just getting some external independent directors uh rbi you know being more active in terms of the supervision goes somewhere but does not go the full way that does not take away the fact that we have examples on the private side where things have gone horribly wrong so so i'm not kind of saying oh this is better and that is bad but if government does not want to keep pumping money on a regular basis as capital for psps the final solution is that they should not be owning it so that they don't have to pump in the capital they can only pump into some of the institutions which they believe can carry forward the government's agenda um but if you have to do that then you have to privatize it you really have to go the whole hog doing is not really solving the problem in my mind but again i think to give credit to the government if you look at what the dispensation was five years back and where we are today we have come a long way we have a very active regulator actively intervening in terms of management of these institutions government is willing government is you know definitely not uh kind of you know intervened in terms of how some of the institutions are managed by their management teams etc so a lot has changed but you know all of us believe that more can change uh with all the push that is coming from the government and rbi to ensure that every bank contributes its might in terms of bringing money and the financial system to the last which have been passed maybe the psl which has been a very important instrument for rbi to push you know certain kind of lending can be treated to ensure that it's going to the right people and the right things are being pushed forward but my view is that if you really want to reform and if you decided that it's a way to reform please do and go the whole hawk rather than you know taking many years to get to the final destination because that does not achieve much it pushes the kangaroo on the road so no half pay house uh move all merely bringing down government shareholding uh won't necessarily address the problem but you know mr bush i want to address one of the issues that you raised in in your previous uh remarks where you said that the government and now more importantly the courts need to recognize that banking is a commercial operation i mean what we're seeing for instance at this point in time with the supreme court hearings is that uh you know the banks should bear the burden of waving off interest on interest now there is a panel the medici panel given to understand it's not public yet but we're given to understand that they would recommend that the government wear the burden if at all the supreme court decides to say that there should be no interest on interest now how do you how do you traverse this uh this balance between the borrower and the depositor which is something that i would imagine going forward will continue to be a challenge for the banking sector you're on youth sir okay so when you see that this issue have been discussed uh in the in the court level and and the rba level uh and but uh many things have been coming on that you see it's a depend on that because of regulator is very strict very much they are given that the how we can be make a price of of the credit and that can be helped on that so that if you see that the recent situation has come which are going to now to the supreme court about the interest of the levy of for this the monatorium period and rbi very clearly say that you know it cannot be like to keep on that that means the regulator actually playing a very strong role how it can be managed and balance both the borrower and also the depositor both the interest so that every bank i i know that that is an uh that is an mclr so so that mclr every month they are calculate on the basis of their cost of fund their operational cost and that risk and accordingly they are given that the interest rate which is giving to the borrower so that could be like to come regulator will be focused how they are playing that role to decide the interest rate of the of the customer for the for the borrowing so that may be the people awareness build up is needed more so that people will understand about it on that okay just on the issue that mr ghosh raised and that is as far as cost of funds are concerned where uh once again uh getting close to a mpc uh and we don't know whether it's going to be a pause most likely it will be a pause given where we see uh inflation at least that's what most polls suggest but what's your own expectation and even if there were to be a further cut do you believe that that would make any material difference in terms of no i don't think so that interest rate cuts are going to make any difference on the credit off day neither do the to the borrowers because you know depending upon the borrower's credit credit worthiness the banks are in a position to take the risk and price their risk accordingly so therefore the borrowers who need more money may not be in a position to get it at a lower interest rate so that is the pricing of credit credit risks so that is but nashville so i think that what was important that you see that today there is a problem that why people are asking for the interest to be waived because they do not have sufficient cash flow to pay so what our suggestion to the government has been that if you allow a one-time restructuring which we have seen in the last 30 years we have seen many of our clients who faced problems and we were able to restructure their loans depending upon their cash flow they have been able to pay back so i think that it at a time of pandemic when you prescribe certain conditions that if a patient is having a blood pressure which is above this you take him into the icu if it is above this you operate him so you can't have those kind of prescriptions you have to have the the commercial understanding between the borrower and the lender and a trust needs to be reposed in the ball what if the lender feels that they do not trust the borrower then they should not even extend the moratorium or refinance the whatever the refinancing policy of the rbi is coming they should not because then they hould say that we call it a day and you know we will not be able to restructure it otherwise the flexibility has to be given because these are commercial decisions so the borrower there has to be a commercial decision and the flexibility has to be given to them to decide that what is good and not through only prescription the prescriptions are important for i'm not saying that is not but when you are meeting it out it's like a patient you know when you when when a patient comes to the hospital the doctors have to take decisions there are certain protocols which are defined but they may have to make decisions that what medicine has to be given whether surgery needs to be conducted whether the person has to be that is left to the doctors so similarly also commercially it should be left between the lenders and the borrowers and not be prepared because it is going to increase the ntl and then you need more capital and then you get into a cycle absolutely so let's see which way the court decides to move on this but just a quick follow-up sir this is a question that's coming from uh you think there's a lot of talk for liberal finance to msmes but no cheap lending at ten percent even for micro units that have started will it be possible in the near future mr conor do you believe that that's likely no i don't think so that you see that at this particular juncture because of the risk averseness which has happened and many of the msmes are facing a lot of issues on their liquidity for them come back and in spite of the policy of the government on on the banks they're being allowed to land under the msme window also where there's been a threaded guarantee scheme but it is going to be slow so msme will be struggling for getting the liquidity in the near future i don't think so that in the next one one and a half years there is going to be a dramatic improvement in the ms means getting the access to liquidity okay uh that's a sobering thought uh uh uh mr chaudhary let me ask you uh you know about what both mr ghosh and mr kenoria were talking about uh you know given the kind of uh caveats attached to the capital requirements the 10 provisioning in case of restructuring of loans do you believe that banks will hesitate to restructure i mean we've just put out a story for instance uh uh you know my colleague has just broken that saying sbi will ask for pledge shares uh at least when it comes to listed entities and personal guarantees when it comes to unlisted uh entities to avail of structuring the package uh do you believe the banks will move forward will be hesitant how do you sleep well banks ideally would like to be paid on time and that's the first option but after that if you have to choose between a restructuring and actually taking the account to npl from a p l perspective and a capital perspective you're better off based on the current regulations that you actually give them the restructuring so rbi structure that well but rb also wanted to ensure that it's not an easy path so that may force the banks to take some level of provisioning uh i think different banks will adopt a different attitude to this some of them will have a more open door policy on restructuring because at least that's a better option than taking it to npl while some of them will obviously differentiate between what should be restructured and what frankly should be taken to npl because that particular unit or that particular borrower might not be ever might not ever revive so let's see how this pans out but at least the way are we and by the way harvey has added one more feature there that if you are a reluctant bank in terms of coming together to help infrastructuring and you are voted out you have to do a higher level of restructuring so rpi has given an incentive for banks to work together to ensure that the reaction is given whenever deserved uh but i think yes given all of us have gone through a crisis in the past or all of us have made very you know large provisions for the mistakes of the past it is very very important that we do not do the same thing again we do not postpone our problems again and i think i'm familiar with rbi in terms of being very careful about who do we give restructuring to and why we give it and that's why the rbi has asked for a you know they created this committee they asked for a board approved policy they asked for various elements which ensured that it does not become uh you know that everyone is just getting a restructuring and and you know you're doing bank through the door they don't want that to happen uh and i comment about that yeah so the legacy issues are not repeated uh we've got christians coming in shiva maheshwari uh talks about how banks can fund startups uh uh let me get both mr chaudhary as well as mr ghosh to comment on that you know the rbi has now uh put startups in the uh priority sector lending category as well but realistically i mean you know do you really believe that banks are going to be lending to just startups given the lack of visibility on profitability cash flows the burn rate do you really see that happening well you know axis had a new economy group set up more than a couple of years back to just go and actually cater to these startups but yes end of the day the lending depends on what the promoters are willing to put on the table and lending in indirectly free instruction something for startups will be short term we will like to see how you're going to get repaid and a lot of the startups actually don't survive so it is a case by case uh you know kind of dispensation which happens and it will continue to happen you know on that basis yes rbi has given us an additional incentive to you know lend to startups in the terms of including into the part of the private sector lending but you know that does not mean that you're just out there and losing your principle to satisfy a certain priority sector target banks will remain conservative they will remain cautious but india is a pretty large startup ecosystem and we cannot ignore that and i don't think the bank has been ignoring it the banks who have got comfortable with it over a period of time uh have increased their exposure and through the banks i think this don't like it because they don't understand the space so i think it depends from bank to bank it depends from startup to startup you know very difficult to give a generic answer it is it is a a complex and a challenging issue but mr let me ask you that and let me also raise them the the other big challenge which is uh you know growth capital equity capital and and what what do you believe will be the options going forward is it the the if you see that the the banking business is a is it trust and a first remains in the depositor trust until the depositor will not trust they will not deposit the money to the bank and the other part is an investor investor also this needed trust if the investor is an order trust on that entity the very tough to attract the investors money to the bank so in that sense we have a need to maintain some of this very very good transparency matter and very good quality portfolio of the bank which can be helped to given the trust to the investor and investors money is not any big issue to attract them so that is the point of course the governance also issue and initially regulator is a very strong and and the investor also coming forward to invest in the more money so i feel that the indian banking industry is not any big challenge to attract the investor to get the money so as for my very small experience on that but also will be like to keep touch with the investor to give the understanding to the investor the the we are maintaining on their interest also depository also and country interest also you are earlier also talking one point on that i've been also missed very much a different experience on that one side of this the the corporate uh the borrower they are demanding on that interest rate they reduce and one side is a small under the uh borrower who are asking that give the money not the interest issue so if you see that they have the different behavior on that so in that you see the attract in the investor is coming more when they are getting this type of borrower is good on that yes you're right we've got a few questions here asking how uh banks can reduce mpas in the near future uh let me let me ask you uh uh that question to start with and then i'll get the two bankers to respond to that you know there's been a lot of talk uh about also the use of uh digital technology and so on and so forth data ai systematically what you believe needs to be the next steps to ensure that we don't go back into an npa i think that basically it is very important digitization is something which is a must for any organization because the artificial intelligence digital platform and especially now with kobe we have seen that people were not on the digital platform and technology was not embraced to the fullest then you would not be having the virtual meeting today also so therefore it is a must for every organization because it helps in cutting costs it helps in bringing in efficiency with analytics you can be more directed towards better quality of loan portfolio studying the industry and studying the sector the consumer behavior so i think that it is a must to have all these and i'm sure that going forward last six seven years there has been a huge learning for the entire financial sector whether it be banks or nbfcs reform their processes internally and what mr ghosh also mentioned right in the beginning that the in the reforming the reforms in the internal systems are also important where you start understanding what kind of client profile because every bank would have every nbfc every bank in the financial sector borrower would have their own appetite for risks and their understanding so according to the understanding of their risks they should be in a position to lend in those sectors like many of the companies who have been lending into there's a there's one question which we are always asked for the last 25 30 years that while you only lend to infrastructure and by equipment financing why don't you go into consumer financing why don't you go into a pct because we say we don't understand that because it is not in our dna it is not in the organization's understanding so if you want or a into something which we don't understand we are taking a risk and as an institution if we take risk there are money of the uh of the depositor the money of the of the bondholders the bankers which is their institutions so we can't put that at risk we are custodian so we should be in a position to lend into only those areas which we understand and all these technology tools help in being more precise and having a better ending quality going forward so i'm sure that you know going forward the quality of of loan portfolio with all banks and nbfcs gradually will keep on improving out the lessons that we have learned but this quote was a different uh situation altogether because no one had expected that this would be directing business to this large an extent which is not only domestic but global absolutely mr chaudhary uh let me ask you that and i'll also ask you this in the context of the question that's coming from vishal pandey he says what do you have to say about the fincen data leaks uh you know but the larger issue there is uh whether the banking system still has enough checks and balances in place to red flags suspicious transactions like illegal transactions but suspicious transactions i mean if you look at what the rbi data is telling us my memory serves me right it takes anywhere between 16 to 24 months for the banking system to be able to identify a fraud up over 100 rupees or more so how do we ensure that there are enough safeguards in place so let me first clarify all the data which is being quoted here is based on banks themselves raising uh and actually calling uh get a suspicious transaction and reporting it to fiu that's at least what my initial uh read of the situation tells me so it is the banks informing of the government of india that these transactions or these uh seem to seem to be suspicious please investigate because we don't have the result to investigate uh so yes a lot of names have come up and i'm sure uh you know rbi will also look into it and we will also look into it and see if there is anything which could be done better but please also try to understand and appreciate what rbi and the government has been doing they formed the fiu all the relatives are working together the kind of norms which you have on kyc the norms we have on re-kyc the norms we have on beneficiary ownership beneficial ownership i think the number of regulations and the compliance which the reserve bank has added over the last four or five years does ensure that i think we have reached a very decent level of uh checking and ensuring that the you know the people are opening the accounts are the right kind of people and we have done their kyc etc that does not take away the fact that the frauds are not happening that does not take away the fact that there are still misuse of accounts and there are frauds which are taking place have you mentioned the large amount well you know rbi had certain norms on how accounts need to be declared an rfa and then a fraud i think over the last couple of years every bank has tightened the standards so a lot of the fraud which you hear about i mean what was not a fraud five years back is the fraud today and rightly so but earlier the fact that the promoters were diverting money was not seen as a fraud issue today it is so you know as the difference have changed as they become stronger stricter the more rigor has come in uh people are moving faster i think there are a lot bigger issues which are coming to the four are being called frauds i think indian entrepreneurs are realizing also that they can't do certain things which were seen as okay uh in the earlier years so as that happens it's just uh i i think it's just part of the journey of uh economy becoming more mature financial system becoming more mature and i think we should see it in the right right i think these are all steps in the right direction uh but yes long way to go i mean you with uh you know him and very rightly talked about digitization but in this digitization during the covet crisis we have seen a real upsurge in the online fraud uh the process are getting more sophisticated uh the the way they talk the way they behave the confidence they give to the customer does lead to situations where at least the individuals are getting fraud much more than before now obviously all of us are reacting to it but the there is upsurge on promise because easy way to make money give me a number of the kind of upsurge in frauds you've seen through the commit period oh yes there is a clear upsurge on at least attempt to do frauds and you know there is also there is a little bit of a problem our our police forces are not all working together i mean there are different states there are you know state issues there are center issues and it needs to be all brought together so that you know there is a web series which has come out on these processors you know so we do need to go and crash them and actually teach them a lesson that they can't do what they're doing but i think we still got some gap which needs to be filled there okay so that's something that we need to watch out for uh we've got uh two minutes two and a half minutes uh before we close so let me get a wrap-up comments from each of you mr ghoshta we started the conversation by asking you for the banking sector will emerge boost battered or stronger so let me ask you in the next 12 to 18 months do you believe it will be bruised battered or stronger will banking banking really always will be stronger it will be much stronger is what you believe yes okay let me ask you guys better or stronger in the next 12 to 18 months yeah so i think that first it has gotten better now it is having some bruises it will be better now going forward so that's how i see that it will take some time but will definitely be better because uh you know the whole country and the regulator the government the banker and bfcs everyone they are interacting very closely to find out solutions to the problems and i'm sure that we will be in a position to sort out the problems which are there it will take some time definitely because this is uh this is something the global pandemic is global and it may take a longer time now all the pundits they say that it may continue for maybe three four years so therefore we have to get used to the kovid 19 problem so i'm sure that human race we are resilient to be in a position to take anything and react in a positive manner well let's hope so mr audrey i'll give you the closing comments then drew's battered stronger in the 12 to 80. i i'm very confident it will emerge stronger and as far as access is concerned i'm even more confident that it will emerge even more stronger than where it stands today because you know we have been using this crisis to do a lot of things which you'll normally do and i think this crisis has taught us a lot of things but also opened up a number of doors which are not open customers uh you know mindset has changed customers are willing to embrace things which they were not willing to do earlier and yes i think it has forced us to take some harsh steps but i think if you're willing to take those hard steps willing to embrace some of those things you will emerge stronger so i'm very very confident that financial system will do well okay virus they are more stronger than me because i am not yet done so any of these places of course is the given the chance of that to stronger in future yes and that is the hope gentleman that is the perfect note to end this conversation on right on time uh uh battered now grows but hopefully we burn stronger through this crisis that's the take from some of india's uh best minds in the banking and financial services sector appreciate you joining us here today thanks very much thank you thank you