The New Banking Paradigm

As the Indian economy attempts to rise from the pandemic with renewed vigour and pursue growth, a key engine powering this ambition has to be the banking sector. With the government clearly setting its growth agenda in Budget 2022, the hope is for private investment to crowd in, following the elevated levels of public expenditure. In this scheme of things, India’s banks will need to play a vital role and support the growth push. As the Reserve Bank of India has pointed out in its ‘Trend and Progress of Banking in India’ report, during 2020-21 banks reported a discernible improvement in their asset quality, capital buffers and profitability, notwithstanding the disruptions of the pandemic. But despite these positives, the RBI does issue a clear warning. The central bank says incipient stress remains in the form of higher restructured advances. “Banks would need to bolster their capital positions to absorb potential stress as well as to augment credit flow when policy support is phased out,” it says. Banks today have to contend with an uncertain post-pandemic world, the rise of fintechs and new kinds of risks as they push their digital strategies. Those banks which are able to navigate this new world will be best positioned to support the economy as it enters what analysts are calling a multi-year up-cycle.

The BT-KPMG Best Banks Survey 2020-21 comes to you against this background. As Anand Adhikari, who helmed this project, writes in his opening essay, lenders that have been able to exploit every adversity to their advantage have emerged winners this year. As you will see in the pages which follow, despite their different sizes and footprint, all the winners have been able to identify opportunities quickly and use digital channels efficiently for customer reach and convenience. The winners of the BT-KPMG Best Banks Survey, now in its 26th year, are chosen after an elaborate process that includes assessing banks on quantitative and qualitative parameters. A stellar jury picked the winners under the qualitative categories, apart from selecting the Lifetime Achievement Award winners and the Bank of the Year. This year, the country’s second-largest private sector bank, ICICI Bank, is the Bank of the Year for the second time in a row, with the jury agreeing that the no-noise, “quiet delivery” approach of ICICI Bank MD & CEO Sandeep Bakhshi is bringing the lender big wins. Bakhshi has created a 360-degree model where the bank is not just aiming to sell a product but creating an ecosystem of offerings to attract the customer. This apart, digital banking solutions are also powering the bank’s growth.

I am also delighted to present to you the Budget Roundtable package in this issue, where the Budget makers, right from Finance Minister Nirmala Sitharaman and her top team, together with Railways, Communications and Electronics & IT Minister Ashwini Vaishnaw, talk to our editors about every aspect of Budget 2022. That’s truly an unmissable set of conversations.