The Epic Shift

Digitisation and proposed ARC for bad loans and development financial institution will help the banking industry reboot. The 25th edition of the BT-KPMG Best Bank Study brings you 'future ready' banks and Fintechs

- ANAND ADHIKARI

The numbers are staggering. In the next three years, the proposed Development Finance Institution (DFI) could have a lending portfolio of ₹5 lakh crore, while the asset reconstruction company (ARC) for bad loans would have acquired ₹3-4 lakh crore stressed loans from banks, releasing huge capital for banking sector expansion. That’s not all. We might also get a few more banks, possibly a big corporatebacked bank or a large NBFC converting itself into a bank. Then there is acceleration of technology adoption by banks, NBFCs and Fintechs. The government, too, has again taken up the pending proposals for privatisation of public sector banks (PSBs).

The ₹180 lakh crore banking industry’s ‘great reset’ is well in progress after the Covid-19 outbreak that made banks trigger business continuity plans and raise capital to cushion any possible deterioration in asset quality. Though the year (FY20) under the BT KPMG Best Banks and Fintech study ended on a challenging note, the survey has captured many well-run banks churning out good numbers and rewarding investors and shareholders. After a long time, private sector ICICI Bank is back in the numero uno position. The new MD & CEO, Sandeep Bakhshi, has turned it around after the exit of former CEO Chanda Kochhar amid an uncertain business environment. South-headquartered Federal Bank is another surprise in the mid-sized category which showed rock-solid performance in growth, size and strength. The newest private sector bank, Bandhan Bank, emerged the top among small banks.

These and other winners have shown exemplary resilience in a sector that is up for exciting changes ahead.

Privatisation, Consolidation, Niche Banks