The Bengal Chamber of Commerce & Industry organised the ‘Financial Market E-Conclave: A Journey through Chaos and Discipline during Next Normal Days’ on February 12, 2021 on E-Platform. 

The Opening Session of the E-Conclave focused on issues in the Banking and the NBFC sectors, the Small Finance Banks, Payment Banks and the Executive Tracks focussed on the Capital market and the Insurance sector. The sessions were ‘Rewriting the growth story of India: Strategies during Next Normal Days’, ‘New Normal, Next Normal and beyond: PSU Banks as an instrument in reviving economy’, ‘Inclusive, Resilient and Innovative Growth Drivers: Banks, NBFCs, Small Finance Bank and Payment Banks’, ‘Indian Capital Market: Challenges & Opportunities in Next Normal Days’ and ‘Indian Insurance Industry: Lesson taught during Lockdown and New Normal days’. 

The E-Conclave had very eminent speakers from all over the country. The E-Conclave was addressed by Chief Mentor-Mr. C S Ghosh, MD & CEO, Bandhan Bank Ltd. and Former President, BCC&I and the Chief Guest was Mr. S S Mundra, Former Deputy Governor, Reserve Bank of India. The Guests of Honour were Mr. Rajkiran Rai G, MD & CEO, Union Bank of India and Mr. CH. S S Mallikarjuna Rao, MD & CEO, Punjab National Bank. 

The other eminent speakers were Mr. Jaspal Bindra, Executive Chairman, Centrum Group, Mr. Ajay Kanwal, MD & Chief Executive Officer, Jana Small Finance Bank Ltd., Mr. Gaurang Shah, Whole-time Director & President, Kotak Mahindra Bank Ltd., Mr. A Balasubramanian, MD & CEO, Aditya Birla Sun Life Mutual Fund, Mr. Nilesh Shah, Group President & MD, Kotak Mutual Fund, Mr. Sundeep Sikka, ED & CEO, Nippon India Mutual Fund, Mr. Imtaiyazur Rahman, CEO & Whole-time Director, UTI Mutual Fund, Mr. Vishal Kapoor, CEO, IDFC Mutual Fund, Mr. Rajeev Radhakrishnan, CIO – Fixed Income, SBI Mutual Fund, Mr. Suresh Badami, Executive Director, HDFC Life Insurance Co Ltd., Mr. Sanjay Datta, Chief – Underwriting, Reinsurance and Claims, ICICI Lombard General Insurance Company Limited, Mr. Gaurab Chaudhury, Sr. Vice President and Chief Strategy Officer, Tata AIA Life Insurance. 

The E-Conclave was moderated by Mr. Tamal Bandyopadhyay, Author & Journalist and Consulting Editor of Business Standard and Chairman Emeritus, Banking and Finance Committee, BCC&I, Mr. Ramesh Kumar Bansal, Chairman, BCC&I Banking and Finance Committee and Head - Treasury, ITC Limited and Ms. Pallavi Malani, MD & Partner, The Boston Consulting Group. 

The speakers deliberated upon several important issues like NPAs, Privatization of Banks, Bad Banks, Digitization in banks, Insurance, Mutual Funds and new strategies for the Next Normal days. 

Some key takeaways from the deliberations are as follows: 

NPAs: The speakers stressed upon better credit underwriting mechanism and ensured that banks have certainly not become risk averse. There have been a lot of learnings from the past NPA cycle - like better underwriting capabilities and better risk management. Now when banks pick up a borrower, banks are prudent from the first stage. When one looks at the outside ecosystem one finds that even players like NHAI have changed their rules. They don’t give contracts unless 80%-90% of the land is acquired or unless all the environmental clearances are in place. Also the HAM project for the road sector is a boon as now more projects are coming under HAM or annuity so the risk is only construction risk and not toll collection risk. So a lot of changes have happened in both the internal and the outside ecosystem based on the earlier learnings. Now banks are in a much better shape so there is no lack of financial tie-ups today. Banks are not risk averse. Most of the projects are getting completed in time. Banks are lending and project implementations are happening. With the new budget there is sufficient impetus on supply as well as demand. So in the days to come the lending will take higher vertical growth from Q4 onwards in the coming FY. The speakers also mentioned that September onwards the collections have improved. When moratorium came banks were expecting a huge slippage and huge restructuring. However, when one looks back such numbers are quite low. NPA stress is there but it is much better than what banks thought would be. The requirement of restructuring has gone down drastically. 

Privatization: Mr. S S Mundra, Former Deputy Governor, Reserve Bank of India was of the opinion that privatization is not a panacea for all the ills. This myth is long busted that ownership changes the behaviour in a very different way. Even if there is a public sector character but if the operational freedom and ownership are separate, it can produce a more effective result, because given the banking environment in India and the continuous setbacks in the Indian and world economy in the past couple of decades, the assurance of a sovereign ownership for a financial entity makes all the difference. 

Bad Banks: The speakers emphasized that ‘Bad Banks’ are relevant steps. It could not only be a provider of finance but also provide the management bandwidth and monitor the projects and support them. Availability of capital could be structured.

Pure Play Digital Banks: As far as the ‘Pure play digital banks’ in India are concerned, the speakers felt that there should be one strategy for ‘India’ and one for ‘Bharat’. If one looks at macro level, one would find that the circulation of currency post demonetization and the pandemic has not decreased, rather it has marginally increased. Use of currency is still prevalent. Although digitization has penetrated in the semi urban and metro pockets and even in rural areas things are changing, but in deep rural areas cash is still there. However, Pure Play Digital Banks wouldn’t be akin to moving into an unknown territory as there are ample successful examples in various countries. 

Work from home and the banking sector: It’s quite evident that technology has played a very crucial technology during pandemic. The speakers reckoned that banking is such a sector that cannot be totally migrated to ‘work from home’ if it is a universal bank. 

While discussing ‘New strategies for the next normal days’  the ‘Originate and Distribute Model’ was discussed by the speakers. 

The E-Conclave received wide media coverage and received viewership in lakhs.