The Epic Shift

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 raise capital to cushion any possible deterioration in asset quality. Though the year (FY20) under the BT KPMG Best Banks and Fintech study ended on a challenging note, the survey has captured many well-run banks churning out good numbers and rewarding investors and shareholders. After a long time, private sector ICICI Bank is back in the numero uno position.