The economic slowdown is likely to weigh on the credit offtake of the banking system, but brokerage firm BNP Paribas says in India the sector will recover, thanks to lower cost of funds, cost efficiencies and lower tax.The brokerage said higher operational efficiency driven by digital initiatives and lower workforce requirements will ensure that the cost to income ratio maintains its downward trajectory."We believe a lower cost of funds, cost efficiencies, and the benefit from lower tax rates should lead to return on equity (RoE) accretion of 370bps for private banks. Higher RoEs should warrant much higher price-to-book ratios (P/Bs). We see a 10-15 percent upside from current valuations for private banks over the next five years," said BNP Paribas.Close Given that the asset quality cycle has peaked, the credit cost should be lower than those in the previous cycle, the brokerage said. related news Sensex at record high but midcaps likely to generate wealth; 20 stocks … [Read more...] about Banking set to see a recovery, life insurance the next big sector: BNP Paribas
While a debate is going on whether the RBI should do more to ease credit to MSMEs, officials said the central bank has provided special training to nearly 11,000 officers at various commercial banks on lending to micro, small and medium enterprises. This training has been provided to officers working at nearly 3,000 bank branches covering all districts in India through more than 2,000 special workshops in the last three years, officials said.These are mostly specialised bank branches catering to the MSME sector where this multi-level training has been provided, covering branch managers, senior officers and even faculty members of staff colleges who can further pass on the training to the bank employees.Most importantly, the training exercise was executed in consultation with the government, including with the active involvement of the MSME ministry and the RBI's objective has been to create a conducive environment to help these small entrepreneurs and companies avail easy and faster … [Read more...] about RBI trains 11,000 bank officers on MSME credit, nearly 3,000 branches covered
Emerging technologies like machine learning and artificial intelligence, along with human intervention have transformed the banking, financial services, and insurance (BFSI) industry, said Andrew Erickson, Executive Vice President of State Street Corporation and Head of Global Services.State Street, a 225-year-old US company provides financial services to institutional investors, including investment servicing, management, research and trading.With presence in over 30 countries, including India, State Street automates processes and integrates global platforms which helps clients get real-time access to a full range of risk management, better infrastructure, investment performance and compliance activities.Close In an interview with Moneycontrol, Erickson spoke about how Blockchain has the potential to make a real change and enhance financial processes. Edited Excerpts:Himadri BuchAssistant Editor|Moneycontrol.com How Muthoot Finance can leverage its IDBI AMC buyEssel Group … [Read more...] about AI and machine learning are transforming banking, finance and insurance industry, says State Street’s Andrew Erickson
Apple has its credit card; Uber has its Uber Money for its network of drivers and delivery agents; Facebook and Amazon both launched payment platforms. So, it was really only a matter of time before Google jumped into the financial services business. After all, at a time when profits in the tech-dominated space is slowing down, companies are looking at diversifying their portfolios to buffer losses and accelerate growth.According to Google spokesman, Craig Ewer, the company wants to help banks’ customers “benefit from useful insights and budgeting tools”. It will initially focus on mobile-first users, but the specifics of the offerings are still being worked out.Rather than opt for a banking charter, which would put it in the path of regulatory norms directly, Google is piggybacking on bank partners like Citibank and Stanford Federal Credit Union to hold and manage customers’ accounts. Stanford Federal Credit Union plans to offer co-branded accounts, with Google … [Read more...] about Google’s next big bet is on banking: ties up with Citibank and Stanford Federal Credit Union
With banks increasingly facing the problem of bad loans, what can help them distinguish between good borrowers and bad ones? This is where the RBI’s Public Credit Registry or PCR comes in.The proposed repository of financial data will contain information about all borrowers. Sakshi Batra talks to Gaurav Choudhury, Deputy Executive Editor, Moneycontrol, to find out why this is an important step, what the implications are and the challenges in implementing this.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app. … [Read more...] about [email protected] | Why is RBI’s public credit registry important?