Most banks, led by largest lender SBI, have serious apprehensions on how the newly licensed banks will function, how much cash they are willing to burn and what will be their business model. Photo: Pradeep Gaur/Mint
What's on Indian bankers' mind
2 min read . Updated: 26 Aug 2015, 10:51 AM IST Joel Rebello
It's banking conference season in Mumbai and issues ranging from payments banks to bad loans are being discussed
mint-india-wire BankersIndiaBanksFicciSBIPayments banksArundhati BhattacharyaDigital technologyATMsNPAs
Mumbai: It's the banking conference season in Mumbai. After State Bank of India held its two-day banking seminar last week, the Federation of Indian Chambers of Commerce and Industry (Ficci) and Indian Banks' Association organised a gathering of bankers and central bank officials this week. Issues were discussed, grievances were aired and solutions were sought on topics ranging from payments banks to bad loans.
Here is what appears to be on top of the minds of the country's top bankers who spoke and attended the conferences.
Payments banks
Most banks, led by largest lender State Bank of India (SBI), have serious apprehensions on how the newly licensed banks will function, how much cash they are willing to burn and what will be their business model. SBI chairman Arundhati Bhattacharya was the most vocal, flagging the risk of these new banks "cannibalising" customers from established full service banks in a "dog eat dog" world.
Retaining talent
New financial service-oriented start-ups, payments banks and upcoming small banks have made the job of human resource managers in banks more and more difficult. These new entities, with their private equity-injected fat cheque books and the lure of innovative businesses, are attracting talent from banks. A senior executive from a large private sector lender who did not want to be named said the war for talent has not been fought so intensely for the last many years and signs are that it could get worse.
Banking has moved from branches to ATMs to Internet and now to mobile phones. However, many a times, new systems do not work. The National Payments Corp. of India, backed by the Reserve Bank of India, has so far failed to make its mobile payment system work, despite much fanfare. Bankers wonder what would be the next big innovation that would succeed.
Non-performing assets (NPAs)
State-run banks are desperately trying to get rid of their NPAs. At least two banks have gone on record to say that they will put ₹ 1,000 crore or more of bad loans on the block by September end. However, they also insist that the sale will happen only "at the right price". But will asset reconstruction companies pay the price state-run banks demand? Unlikely. In which case these banks will have to keep the NPAs on their book just like Union Bank of India, which could not sell any of the ₹ 900 crore worth of NPAs, it put on the block in the quarter ended June 2015.