Inclusive Banking for All: RBETA 2024 Set to Highlight India’s Sparkling BFSI Story

India’s BFSI story:  Banking, Financial Services and Insurance (BFSI) sector is intricately linked to India's economic heartbeat. In FY22, BFSI sector's share of Indian GDP increased to about 12 per cent. With country's GDP set for growth, BFSI sector is a key facilitator, positioned to thrive alongside overall economic expansion.

To celebrate growth, innovation, and tech enablers of India’s BFSI story, Republic Business is coming with its inaugural edition of Republic Business Emerging Tech Awards 2024 (RBETA 2024). 

Banking industry in India has historically been one of most stable systems globally, despite global upheavals. health of Indian banking system is robust, fortified by multi-year low non-performing loans and an equate level of capital and liquidity buffers.

RBETA 2024 will honour banking sector’s growth as a rical enabler for every citizen in country. event, marking innovation and entrepreneurship in tech space, will shed light on rise of India’s booming BFSI sector. 

Industry Outlook

In FY23, banking sector in India exhibited robust growth, with deposits reaching approximately $2.2 trillion and loans totalling around $1.67 trillion, resulting in a credit-deposit ratio of 75.8 per cent, highest in three years.

SCBs reported a notable credit growth of 15.4 per cent, marking an 11-year high, driven primarily by personal loans, services sector financing, and agricultural loans. 

Particularly, personal loans surged by 20.6 per cent, mainly fueled by housing loans. ditionally, SCBs expanded ir footprint with a 4.6 per cent increase in new branch openings, especially in Tier 4, 5, and 6 centres. 

MSME sector experienced significant credit growth, averaging over 30.6 per cent, supported by government initiatives like Emergency Credit Linked Guarantee Scheme (ECLGS). This sector's share in gross credit uptake expanded from 17.7 per cent in January 2020 to 23.7 per cent in November 2022, underscoring its growing importance in industry.

Expansion with improving asset quality

population covered with bank accounts increased from 53 per cent in FY 16 to 78 per cent in FY 21. For first time, Gross Non-Performing Asset (GNPA) of SCBs has decreased to a 7-year low of 5 per cent in Sept 2022, and Net NPA has declined to a 10-year low of 1.3 per cent. 

Banks' gross non-performing asset (GNPA) ratio continued to improve in second quarter of FY24, easing to 3.2 per cent as of end-September, Trend and Progress in Banking report released on Wednesday showed.

More than 1.6 Lakh bank branches are translating to approximately 15 branches per 1 Lakh of population. This is furr complemented by a network of 2.17 lakh ATMs, out of which 47 per cent are in rural and semi-urban areas. Banking services have been me accessible to every village within a 5 km rius in 25 states and 7 Union Territories covering 99.94 per cent of villages.

Technology enabling BFSI boost

Technology is transforming Banking, Financial Services, and Insurance (BFSI) sector in India, driving efficiency and accessibility. option of a 'risk-based' approach over a 'one size fits all' model in Know Your Customer (KYC) process streamlines onboarding while enhancing security. Platforms such as Digilocker furr vance digitisation, enabling MSMEs, large businesses, and charitable trusts to securely store and share documents online, boosting transparency and operational efficiency.

Under revamped credit guarantee scheme Rs 9,000 crore more are being injected to support MSMEs, using technology for efficient risk mitigation and improved access to financing. 

Initiatives like GIFT-IFSC and creation of an EXIM Bank subsidiary for tre re-financing promote financial innovation and stimulate cross-border investments are also turning out to be enablers of better BFSI infrastructure. 

Moreover, efforts to improve governance and investor protection in banking sector through technology-driven mechanisms are boosting confidence among stakeholders, fostering a conducive environment for financial inclusion and economic growth. 

Government Initiatives 

Prime Minister Narendra Modi’s ‘Jan Dhan Yojana’ stands as world's largest financial inclusion initiative, facilitating enrollment of over 486 million beneficiaries, with more than 265 million being women. 

In 2013, Reserve Bank of India (RBI) also issued guidelines promoting foreign investments in banking sector by allowing foreign banks to establish wholly-owned subsidiaries (WOS) in India. 

introduction of fully digital and hassle-free Kisan Credit Card (KCC) and Ahaar e-KYC auntication is enabling NBFCs, payment system providers, and participants to acquire Ahaar Auntication Licences.