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Veteran banker KV Kamath on Wednesday urged the banking industry to advocate for a level playing field with new age tech-focused players, saying the rise of technology has caused disruption in the financial services industry.
He said bankers should advocate with the regulator for a level playing field and that the regulatory reporting requirement should be extended to new age players.
“We now have a digital mindset at all levels, there is the rise of technology and bank customers are now receptive to change. New players are arriving and seizing and exploiting the opportunity in the banking and financial space.
“As long as you are quartered and protected by the regulator, you have room to breathe… now you must see that you have a level playing field with these new players. It appears from a banker’s point of view that the field game is not equal.
“I think it’s up to us bankers to plead with the regulator what is needed to level the playing field,” Kamath said during his inaugural speech at the “FICCI-FIBAC 2021” virtual event on Tuesday. .
Kamath, who was appointed president of the National Bank for Infrastructure and Development Finance (NaBFID), noted that disruption caused by these new players in the financial space was inevitable.
“I hope that happens with a level playing field. Likewise, the regulatory reports that banks have to have (to the RBI)… I think they have to be extended to these players (too). Next 12-18 months, we have to sort them out as players, “he added.
Kamath acknowledged the big transition the banks have made over the past two years during the pandemic, however, the only problem is how to compete.
“We’ve seen platforms in India making huge strides as banks. The only problem is you can compete, but you can’t take away the value they’ve brought.
“I would say the disruption is upon us and it’s up to us to see how quickly we can change. Change doesn’t always come at the cost of money, it can cost a lot more than money if you don’t make a decision, â€Kamath said. .
Speaking of the digital economy, India has a lot of catching up to do, he said.
“The digital economy in China is around 40% of the overall economy, in India it is more likely 4 to 5% today. Where it will go in two years, I think it will be 5 to 40%. ” he added.
Regarding the operations of the National Bank for Infrastructure and Development Finance (NaBFID), he said that the lending institution will start disbursing capital from April 2022.
“We have an idea of ​​what their (business) needs might be… these are internalized and I can mention that by April we should be ready. By then we should have the capital,” he said. Kamath added.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)
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