Scoring in their second innings

A clutch of shadow bank entrepreneurs have weathered the storm and are now evangelists for the business, reports RAGHU MOHAN

- RAGHU MOHAN

It's time that the NBFC (non-banking financial companies) sector comes out of its own shadow as well as that of the banking sector. I am sure that NBFCs will play a significant role in achieving the dream of a $5 trillion economy going forward," said M Rajeshwar Rao, deputy governor, Reserve Bank of India (RBI) in February last year. It was the first ever ringing endorsement of NBFCs from a senior RBI official in a speech dramatically titled by the central bank's staid standards: 'No more a shadow (of a) bank'.

Gunit Chadha, founder of APAC Financial Services (and the former Asia Pacific chief executive officer of Deutsche Bank), could not agree more. "Six years into our journey, I've realised that the deeper differentiation lies in agility and adaptability to changing market and customer dynamics." His point is that unlike banks, which operate on a massive scale with legacy systems and challenges of turning a big ship, NBFCs can run pilots, refine strategies, and pivot based on real-time feedback. At the same time, being a relatively young organisation gives the opportunity to build institutions the right way from the ground up - focusing on governance, risk culture, and people. "This was a priority for me from day one, shaped by my experiences at large global and Indian banks which provided good learnings on what to do, and what not to do," he says.

Banking veterans