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Banking for the Future

BusinessToday.In     March 17, 2020

In the end, it was a tie for the title of the Bank of the Year at Business Today-Money Today Financial Awards 2020. State Bank of India (SBI) and private sector major HDFC Bank jointly bagged the award. HDFC Bank won for the sixth year running, while for SBI, it was the second time. HDFC Bank also bagged 'Best Large Bank' and 'Best Fintech Engagement' awards. SBI was also awarded for being 'Best in Rural Outreach'.

The BT-MT Financial Awards identify winners across four financial categories - mutual funds, pension funds, insurance and banking. The awards were conferred by Chief Guest R. Gandhi, Former Deputy Governor, Reserve Bank of India (RBI).

Delivering his keynote address on 'New Vistas in Indian Banking', Gandhi said retail credit demand will continue growing as India moves towards becoming a low inflation economy. "Going forward, India will have low inflation. Naturally, interest rates will also come down, so will returns from savings instruments. This is what is making people borrow more and enjoy goods and services now rather than investing in savings instruments. Many countries have followed that pattern. It is now happening in India," he said.

The ceremony was preceded by a panel discussion on 'Finding the Right Asset Mix in 2020'. The panelists included Sunil Singhania, Founder, Abakkus Asset Management Company; Swarup Mohanty, CEO, Mirae Asset Global Investments (India); Lovaii Navlakhi, Founder and CEO, International Money Matters; and Somasundaram P.R., Managing Director - India, World Gold Council. Lovaii Navlakhi said investors should avoid the greed to earn extra income from debt instruments. "The objective of investing in fixed income is safety of principal and inflation-beating returns. But people focus more on earning higher returns. The intention to make extra money is what causes harm," he says. World Gold Council's Somasundaram said gold reserves held by global central banks are just 10 per cent below the peak seen around 1965. Mohanty of Mirae Asset Global Investments advised investors to keep it simple and reduce mistakes. Singhania said he sees value in sectors such as IT, pharma, consumption, infra, chemicals and metals.

The Best Banks were selected in collaboration with KPMG. A jury comprising Vinayak Bahuguna, MD and CEO, ARCIL India; Arun Purwar, former Chairman, SBI; Shailesh Haribhakti, Chairman, Desai Haribhakti Group; Seshagiri Rao, Joint MD, JSW Steels; and Sandeep Chiber, India Head, FIS Global, identified the winners. For the Money Today Awards, ICRA Online was the data partner for identifying nominees in mutual funds, while Policybazaar shortlisted candidates in insurance. A jury comprising V.K. Sharma, former Chairman, LIC; Ashishkumar Chauhan, MD and CEO, BSE; Sunil Rohokale, MD and CEO, ASK Group; Sandesh Kirkire, IMC PVG Chair in Banking and Finance, JBIMS; and Vishal Dhawan, Founder, Plan Ahead Wealth Advisors, identified the winners.

The awards for the 'Best Fund House Overall' and the 'Best Fund House Debt' were bagged by Kotak Mutual Fund. Axis Mutual Fund won the award for 'Best Fund House Equity'. HDFC Pension Management was awarded the 'Best Pension Fund House' tag, while HDFC Short Term Debt Fund and Mirae Asset Emerging Bluechip Fund were given the 'Best Value Creator Fund Debt' and 'Best Value Creator Fund Equity' awards, respectively. Deepak Agrawal of Kotak Mutual Fund and Neelesh Surana of Mirae Asset Mutual Fund won the Best Fund Manager award in debt and equity categories, respectively.

ICICI Lombard General Insurance bagged the award for the 'Best General Insurance Provider'. Life Insurance Corporation of India was given the title of the 'Best Life Insurance Provider of the Year'. Star Health Insurance was given the 'Best Health Insurance Provider of the Year' award, while Bajaj Allianz General Insurance and ICICI Lombard General Insurance were joint winners in the 'Best Motor Insurance Provider of the Year' category.

Perfios won the best fintech award in value-added services, while Paymate and NeoGrowth won in payment and lending categories, respectively.

The Best Small Bank award was conferred on Bandhan Bank, the Best Mid-Sized Bank was IndusInd Bank and the Best Foreign Bank title was given to JP Morgan India. The 'Best Innovation Award' went to ICICI Bank.

Even as lending by fintech players is minuscule compared to lending by commercial banks, the magnitude will grow. Gandhi said demand for loans will keep growing as individuals now prefer credit over allocating money in savings instruments that are fetching low returns.

Among other trends in the economy, investors will keep moving to riskier instruments such as equities and mutual funds. As for micro, small and medium enterprises (MSMEs), they are also shifting to fintech players. "New business models are emerging. They are gathering data from alternative sources and helping MSMEs access funds," said Gandhi, adding that banks will not give large loans. "With rising NPAs, banks are being forced to be limit credit disbursal. Big corporations will have to approach capital markets for large funding," he says. Meanwhile, Gandhi doesn't see India getting back to double-digit credit growth. Credit demand from services has slowed. It is one of the key reasons for low credit growth. According to the RBI, growth in bank credit dropped to 8.5 per cent in January compared with 13.5 per cent in the same month a year ago.

The BT-MT Financial Awards were sponsored by SIS.


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