‘Enough funds available with banks, industry should take advantage’

  Addressing FICCI’s  92nd Annual Convention, SBI Chairman Mr Rajnish Kumar said that there is enough cash available in the banking system and its now for the industry to take advantage of this.
  Mr Kumar said that India’s target of $5 trillion cannot be achieved unless there is investment in the economy.
  “Today there is no problem of liquidity or availability of the funds with the banking system. Currently three sectors, solar, city gas projects and roads, are seeing demand for credit,” Mr Kumar said, adding banking system today is more cautious than what it used to be.
   On the issue of loan monitoring, Mr Kumar said, “The method of lending itself would need to undergo a change. Asset based lending will continue to work for term loans but for working capital, we will have to move to cash flow-based lending.”
  Commenting on the issue of interest rates, Mr Kumar said that in banking system dependence for borrowing in India is largely depositors. “We can’t lower the interest rates without lowering the interest rate for depositors and there is a threshold below which we cannot reduce the interest rate for deposits,” added Mr Kumar.
  Mr Sandip Somany, President, FICCI, said “The banking system itself is changing at an unprecedented pace given the advent of technology. Digitisation is the new mantra and data is the new source of revenue. Digital financial inclusion is now in vogue and the partnerships being worked out between banks and fintechs are yielding some very good results.”