The implementation of the Goods and Services Tax, rollout of the virtual ID-based Aadhaar authentication and the real-time bank transactions through unified payment interface will open up more lending opportunities for banks over the next three years.
That’s according to RBL Bank Ltd.’s Rajeev Ahuja who said lenders need to be agile and adaptive to be able to seize these opportunities. “[Credit] Demand is never a problem for the banking sector, it is the quality of supply, institutionalisation, infrastructure and the way to keep it agile,” Ahuja, executive director at the private lender told BloombergQuint.
Ahuja expects the financial services sector to grow at a faster pace this year over the previous one. RBL Bank, he said, is on track to achieve the 35 percent growth target by 2020.
The Mumbai-based lender, according to Ahuja, has grown at an average 40-45 percent in the last seven years, aided by asset quality checks and risk management. The banking industry has grown between 8 and 12 percent during the period, he said. That’s when the Indian banking sector is grappling with mounting non-performing assets and a host of scams. RBL Bank’s gross NPA stood at 1.4 percent as of March 2018, according to its exchange filing. That compares with the industry figure of 11.2 percent during the same period, a report by Crisil said.
Ahuja said specific issues for the bank in the last two years have abated, and RBL Bank is not involved in the top 30-40 cases admitted to the National Company Law Tribunal. “We cannot take growth and risk management for granted.”