At the Business Standard BFSI Insight Summit held in Mumbai, senior officials from prominent Public Sector Undertaking Banks (PSUs) in India discussed the present growth phenomena in the banking space supported by adequate economic fundamentals. However, they advocated for cautious growth, better risk management, and creativity in enhancing the experience of customers.  

Debadatta Chand, the MD and CEO of Bank of Baroda, explained that the growth of the banking industry is dependent on the state of the economy. “Banking sector will be in the sugar zone until the economy is in a good state which explains the correlation between these two sectors quite well.” 

The panelists, S.L. Jain (Indian Bank), Ashwani Kumar (UCO Bank), and K.S. Raju (Canara Bank) underlined the importance of customer-centric innovations in the context of the changing banking scenario. They stressed that with the advancements in banking products, risk management practices should undergo developments too.  “It is important to enhance our risk structures in tandem with development of new products,” they said. 

“Each bank should evaluate its risk appetite carefully,” narrated Kumar, while Raju added that the competition of public sector banks and private sector banks has become very thin on the margin, and credited this to technological and human resource investments for more than the last 10 years. The executive also expressed confidence regarding the PSBs posting continued double-digit growths, with Raju pegging the growth of the sector at 10-12% with backing of external advice and administration. “The efforts of the RBI, the government, and the bank boards have placed the public sector banks in a healthy level of rivalry,” he stated. 

The attendees observed that there has been a rise in defaults on personal loans but reassured that it was still manageable. “We are in the business of lending on the basis of data,” stated Jain, underscoring that personal loans without collaterals compose less than 1.5% of the total lending by Indian banks. The banks also looked into other advances including looking into Central Bank Digital Currency (CBDC) pilots in order to aid the transfer of government benefits in addition to the banking activities. 

With customer journey being the buzz word, the PSB chiefs were of the view that they would still remain focused on product and service innovations for different customer segments; thus, extending the concept of customers at the core of banking strategies.