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The RBI further said the MoU will also provide a good basis for promoting mutual understanding, developing efficient payment systems and achieving cross-border payment connectivity.
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India has 49.4 crore acres of agriculture land, highest after the US. If the entire farm land is irrigated, India can feed the whole world, amit shah added.Addressing a national conference, Shah said, "If we look back and see the last 90 years journey of long-term financing through cooperatives and how it has percolated down, if you see the data, it has not grown."
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"The bank has signed a binding term sheet with JC ARC LLC and JC Flowers Asset Reconstruction Private Ltd for strategic partnership in relation to sale of identified stressed loans of the bank," Yes Bank said in a regulatory filing.
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Pension Fund Regulatory and Development Authority (PFRDA) "has vide its letter dated July 7, 2022 (received by us on July 15, 2022), granted approval for change in status/constitution pursuant to the scheme in accordance with the PFRDA (Point of Presence) Regulations, 2018, subject to the conditions mentioned therein," HDFC Bank said in a regulatory filing.
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State Bank of India (SBI) chairman Dinesh Kumar Khara is looking to beef up operations of the country’s largest lender, while preparing it for the future. In an interview, he shares his assessment of the economic situation and the bank’s strategy.
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India’s macro risks have receded in the last six weeks due to the steps taken by the Centre & the Reserve Bank of India (RBI), and the decline in oil prices due to global recession fears, the finance ministry said in a report on Thursday.
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Several banks have increased interest rates on their foreign currency non-resident (FCNR) deposits after the RBI waived reserve requirements and lifted interest caps earlier this month.
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Non-banking finance companies (NBFC) are likely to rely on securitisation as a funding source led by higher volumes, which will lead to increased disbursements by non-banks after a slowdown. Banks can also improve their retail and priority sector targets through securitisation, ratings agency Crisil said in a report.
Securitisation volume grew by 70% to Rs 35,000 crore in the first quarter of the current financial year led by higher participation from public and private sector banks along with other financial institutions. Foreign financial institutions, including banks, acquired 17% of all assets securitised. A stable market environment could mean deeper participation by other large investors, including foreign institutions and mutual funds, the agency said.
Additionally, the base effect caused by low volumes last fiscal due to second wave also led to sharper growth in Q1FY23. The growth in securitization volumes would have been higher if not for higher interest rates, which prompted divergent yield expectations among NBFCs and banks the ratings agency said.
“More than 80 non-bank entities being present in the market in the first quarter, up from 50 last fiscal, indicates strong comfort originators have with the securitisation process. Market activity in the past quarter also reflected the diversity of various asset classes across secured and unsecured loan categories,” Krishnan Sitaraman, senior director and deputy chief ratings officer of CRISIL Ratings said.
Mortgage-backed securitisation (MBS) loans comprised 45% of the total volume compared with 53% in the previous year while asset backed securitisation (ABS) comprised the balance.
Within the ABS category, commercial vehicle (CV) loans comprised 49%, and microfinance 20% of transaction value, with many underlying loans eligible for priority sector lending (PSL) classification. Securitisation in gold loans (14%) continued to rise, while two-wheeler, education, school finance and unsecured loans saw renewed investor interest.
However, any sharp rise in interest rates, high inflation and future waves of the pandemic impacting economic activity could be potential headwinds for securitisation volumes this fiscal, the report said.
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Public sector lender Punjab National Bank (PNB) has gone live on the account aggregator ecosystem as financial information user (FIU) as well as financial information provider (FIP), the lender said in a press release. Other than PNB, Union Bank of India, Canara Bank and Indian Bank are the three other PSU lenders who have connected to the account aggregator system.
“Punjab National Bank is working on multiple business use cases which can leverage on the account aggregator ecosystem and offer interesting products to its customers. This will further enhance the outreach of the bank to provide customized digital products to its customers,” Atul Kumar Goel, managing director and chief executive officer of PNB said.
Other PSU lenders are in various stages of implementing the process of connecting to the account aggregator system. While State Bank of India (SBI), Bank of Baroda and UCO Bank are in the testing phase, Indian Overseas Bank, Punjab and Sind Bank, Bank of India and Bank of Maharashtra are in the development phase. Central Bank of India is in the evaluation phase, according to information on Sahamati, a member-funded industry alliance.
Most of the major private sector banks such as HDFC Bank, ICICI Bank, Axis Bank, IndusInd Bank and Kotak Mahindra Bank have also connected with the account aggregator system. As of Monday (July 11), a total of 56 banks, fintechs and non-banking finance companies (NBFC) are live on the system.
Earlier this month, Union Finance Minister Nirmala Sitharaman had directed all public sector banks to implement the account aggregator system by the end of July. The account aggregator system is a financial data exchange where banks, fintechs or NBFCs can exchange customer data after taking consent from such users. The move is expected to give consumers more control over their data and also bring down processing costs for banks through access to better data. The system was introduced in September 2021.
Under the account aggregator system, a lender who requests the data is called financial information user (FIU) and the one that provides the data is called financial information provider (FIP). The data cannot be shared without taking consumer’s permission. The entities which facilitate the data exchange are account aggregators. OneMoney, FinVu, CAMS and NADL are providing facilitation services after receiving approval from the Reserve Bank of India (RBI). There are 8 entities awaiting RBI approval for providing account aggregator services, a National Securities Depository Ltd (NSDL) and PhonePe.
Since the launch of the system in 2021, 8.6 lakh accounts are linked by account holders and 8.1 lakh consent requests have been fulfilled so far.
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The insurer said it has been consistently declaring bonuses on participating products every year, and the bonus amount for FY22 is 12 per cent higher than that of FY21. This bonus sum will benefit 4.95 lakh customers whose policies were in force as of 31st March 2022, PNB MetLife said in a release.
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The dedicated bankruptcy court has approved a revival plan submitted by Orissa Metaliks (OMPL) for the integrated steel manufacturer MSP Metallics.
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India’s bad bank has offered to buy the first toxic asset at just 8% of its outstanding loan value, a deal unhappy lenders are planning to negotiate in the hope that the recovery gets better, said two bankers in the know.
According to the bankers cited above, the National Asset Reconstruction Company (NARCL) has bid about Rs 80-85 crore for Rainbow Papers, a non-performing asset which owes banks Rs 1,100 crore.
The consortium is led by Indian Overseas Bank (IOB), which is planning to hold a meeting with other member banks to take a call on the future course of action. “A meeting had been planned for last week, but that got cancelled. IOB is expected to convene another meeting where banks will decide how to go ahead with the resolution. They want to conclude it by end-August,” said one of the bankers.
Emails seeking responses from NARCL and IOB remained unanswered till the time of going to press.
According to the last available annual report for Rainbow Papers for FY18, other bankers to the company were Corporation Bank (now merged into Union Bank of India), Union Bank, Allahabad Bank (merged into Indian Bank), Axis Bank, Bank of India, Punjab National Bank and Dena Bank (merged into Bank of Baroda).
The bid for Rainbow Papers was the first one made by NARCL after repeated delays in the operationalisation of the institution. It had initially missed the March 31, 2022 deadline for acquiring 15 assets with an aggregate exposure of Rs 50,000 crore as hiring for some senior positions took time. The bad bank put in the bid for Rainbow Papers in June, ahead of the June 30 deadline for operationalisation.
Bids made by NARCL are different from those of other ARCs in the way that security receipts (SRs) to be issued by the former will be sovereign-backed. While most deals between banks and ARCs are now all-cash, the NARCL will have an upper hand, having to pay just 15% of the deal amount as upfront cash and the rest in the form of SRs.
According to a paper published as part of the Reserve Bank of India’s February 2022 bulletin, the average rate of recovery for seven bad banks in Asia and Europe ranged between 22% and 87%.
For Indian lenders, recoveries through the Insolvency and Bankruptcy Code (IBC) route have been below par of late. Recovery for financial creditors from the resolution of stressed firms under the code crashed to a record quarterly low of 10.2% of their admitted claims during the three-month period ended March 2022. At Rs 1,288 crore, the realisation for financial creditors in Q4FY22 dropped below the assets’ liquidation value of Rs 1,316 crore for the first time, according to data from the Insolvency and Bankruptcy Board of India (IBBI).
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The Reserve Bank of India (RBI) this week introduced a new mechanism for international trade settlements in rupees, aiming to promote exports and facilitate imports.
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Retail inflation eased marginally in June but stayed near the 7% mark and above the central bank’s upper tolerance band for the sixth month in a row, triggering prospects of more interest rate increases by the RBI in the months ahead.
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The Reserve Bank of India (RBI) has turned down a proposal to let banks spread provisions against their treasury losses in the June quarter over four quarters. The central bank last week conveyed its decision in a written communication to banks who had sought the concession, according to well-placed sources.
An email sent to the RBI seeking its response remained unanswered till the time of going to press.
Rising bond yields may cause Indian banks to incur mark-to-market (MTM) losses of up to Rs 13,000 crore in their bond portfolios in the quarter ended June 2022 (Q1FY23), according to Icra.
The lack of a dispensation will hurt public sector banks (PSBs) more, given their higher holding of government securities of longer tenor.
Icra estimates MTM losses on bond portfolios to range between Rs 8,000-10,000 crore for PSBs and Rs 2,400-3,000 crore for private banks in Q1. Anil Gupta, vice president, Icra, said that despite the expected MTM losses, net profits of banks will remain steady, with the treasury losses being offset by an expected growth of 11-12% in their core operating profits in FY23. “However, if the yields harden substantially going forward, there could be a sequential moderation in the net profits in FY2023,” Gupta said.
People familiar with the RBI’s thinking said that the central bank believes it has done enough to protect bank treasury books from the effect of rising yields by not launching the standing deposit facility (SDF) before April.
According to the June 2022 edition of the financial stability report (FSR), banks’ trading profit recorded a marked reduction after Q1FY22. During Q4FY22, it fell by 17% on a sequential basis for PSBs, while it increased for private banks. Foreign banks reported trading losses for the fifth consecutive quarter, with trading losses increasing in Q4FY22.
Banks are required to mark down their available for sale (AFS) and held for trading (HFT) bond portfolios on a quarterly basis to account for declines in the valuation of their holdings. In case of MTM losses, they must make provisions against these losses, which hurts their profitability.
The repo rate hike of 90 basis points (bps) in May and June, accompanied by other measures aimed at the withdrawal of system liquidity, have led to a sharp rise in yields during the current quarter. Between March 31 and July, the yield on the benchmark 10-year government bond has risen 59 basis points (bps) to 7.466%.
The FSR said that during FY22, PSBs preferred to augment their allocation in state development loans (SDLs) and wind down their other holdings in the HTM category. Under the then prevailing low interest rate conditions, banks sold a large portion of their HTM portfolio and booked profits.
“Since G-Secs form the largest share of the HTM portfolio, the presence of substantial unrealised losses, especially in respect of PSBs, at the beginning of the interest rate tightening cycle, portends risk to their financial health going forward,” RBI said in the FSR.
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The Reserve Bank of India (RBI) has imposed a penalty of Rs 1.68 crore on Ola Financial Services for non-compliance with certain provisions of know your customer (KYC) norms, the central bank said in a press release. The RBI has imposed the penalty under the Payment and Settlement Systems Act, 2007, which gives the central bank the authority to impose penalty on companies not complying with norms.
The RBI had issued a notice to the company to show cause and after considering its response, the central bank decided to impose a penalty.
Ola Financial Services, a part of taxi-hailing platform Ola, provides e-wallet services under the brand name Ola Money. The wallet is issued by Zipcash in co-branding with Ola. The company also issues credit cards and offers postpaid services.
Last week, the RBI imposed a fine of Rs 5.72 crore on Federal Bank, Rs 70 lakh on Bank of India, Rs 1 crore each on IndusInd Bank and Kotak Mahindra Bank for non-compliance.
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The housing finance sector is poised for a higher growth in loan disbursals and improvement in asset quality during the current financial year. The loan portfolio of housing finance companies (HFC) is expected to grow by around 12% on year in the current financial year on steady growth in disbursements and improving real estate sector and macro-economic environment, CareEdge said in a report.
HFCs are gaining market share in the housing portfolio market as compared to banks due to a higher growth in loan disbursals. This trend is likely to continue going ahead, the ratings agency said. HFCs witnessed a higher growth rate in loan disbursal compared to banks. HFCs posted a double-digit growth rate at 11% on year, surpassing the 7% growth rate reported by the banks. The growth in the HFC sector in FY22 was driven largely by the prime segment, which grew at 9% on year, an improvement of 100 bps compared to previous year.
In the affordable HFC space, loan against property (LAP) drove the loan growth with the share of LAP increasing to 25% from 19% on year. Affordable HFCs also benefited from a smaller base due to moderation in growth during pandemic years and the underwriting of loans in the below-prime segment.
Going ahead, the profitability of HFCs is likely to come under pressure on account of rising interest rate scenario. The large HFCs have already started increasing lending rates in line with the increase in their borrowing costs. The full impact of the re-pricing will be visible in FY24 as a lot of resets may happen during the current year, the ratings agency said. Although bank borrowings increased for HFCs in FY22, fundraising through market instruments remains a major source.
The gross non-performing asset (NPA) ratio is expected to decline by around 10 basis points (bps) on year to around 3.1% in FY23, the ratings agency said. Although the NPA levels are expected to decline, HFCs witnessed higher defaults in their wholesale portfolio in the previous year. HFCs have maintained higher liquidity which will also aid in cushioning future losses, the ratings agency said.
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Rising bond yields will force banks to report mark-to-market losses of up to Rs 13,000 crore on their investment portfolios in the April-June quarter, a report by Icra said on Tuesday. Profits will moderate for the quarter, but improved loan growth and operating profits will ensure that banks’ bottom lines remain “steady” for FY23, the report said.
The effect of the treasury losses will be felt more by public sector banks as they hold a higher share of government securities (G-Secs) of longer tenure.
Public sector banks are expected to face mark-to-market (MTM) losses to the tune of Rs 8,000-10,000 crore, according to Icra estimates, while private banks may report MTM losses of Rs 2,400-3,000 crore in Q1FY23.
“If the yields harden substantially going forward, there could be a sequential moderation in the net profits in FY23,” Anil Gupta, vice-president of Icra, said.
Despite the headwind caused by the treasury losses on banks’ profitability, its effect will be offset by improvement in core lending operations. With the rising yields, companies prefer to meet their funding requirement by taking loans, instead of tapping the debt market. This has led to an uptick in corporate credit offtake, complementing other loan segments. The non-food bank credit grew in double digits during Q1FY23. The ratings agency expects incremental bank credit offtake of Rs 12-13 trillion for the current fiscal, higher than Rs 10.5 trillion in FY22.
“Despite these expected MTM losses, we expect the net profits of the banks to remain steady, given the expected growth of 11-12% in their core operating profits in FY23, which will more than offset the MTM losses,” Gupta said.
With 43% of floating rate loans being tied to external benchmarks and a lag in increase in deposit rates, banks are likely to show an improvement in their operating profits. The transmission of changes in policy rates takes place faster in case of externally-benchmarked loans.
On the asset quality front, banks will continue to post improvement on account of lower slippages and credit growth. The gross non-performing asset (NPA) ratio is expected to improve to up to 5.2% by the end of the current financial year, from 6% in the previous year, Icra said. However, the net NPA ratio is likely to remain range bound at around 1.6-1.8% on account of lack of recoveries and upgrades. Slippages are likely to improve further to around 2.5-2.7% in FY23 due to falling bounce rates and overdue loans, the agency said.
Despite the improvement in headline asset quality, stressed assets stood at 3.8% of standard advances as on March 31, 2022, higher than the pre-Covid level of 3.1%, the agency said.
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This comes amid a falling rupee, which has triggered a slew of regulatory actions aimed at bringing back overseas inflows and cutting import-related dollar payments.
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The major players of the mutual fund industry have yielded ground in the equity segment, with the share of the top seven-eight AMCs (asset management companies) witnessing a decline, analysts at Nomura wrote. The market share of these AMCs in the pure equity category has declined to 46%, the lowest in the previous four-five years, they said.
Top AMCs (except SBI MF) lost market share of 310 basis points year-on-year in May 2022 in the pure equity segment. “We note that month-on-month trends are pointing to a market-share loss,” Nomura analysts wrote.
HDFC AMC lost market share of around 100 bps YoY in May despite robust performances of all schemes, while Axis AMC has lost 70 bps, down 20 bps YoY. ICICI Prudential AMC continues to hold up well, maintaining its market share in most of the segments. Nippon witnessed a 90 bps Y-o-Y decline, giving up the recoveries in April when it had rebounded to the December 2021 levels.
SBI MF has bucked the trend, sustaining market share gains, which increased 40 bps in FY22. “That said, M-o-M market share trends, even for SBI MF, point to a market-share loss, and we believe they warrant monitoring,” analysts wrote.
The gross inflows into equities at Rs 28,300 crore have fallen around 40% since March 2022. Net equity flows (including ELSS) have been reasonably good at Rs 15,600 crore, with flows from systematic investment plans (SIPs) holding up well at Rs 12,300 crore (flat month-on-month) and continued positive lump-sum flows despite uncertainties in the stock markets. Smaller redemptions, down 34% from the March levels, and a stable SIP book have supported net inflows into equities.
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Bank of Baroda on Monday increased the marginal cost of funds-based lending rates (MCLR) on some tenures by 10-15 basis points (bps), effective July 12. BoB has increased its one-year MCLR by 15 bps to 7.65%, the lender said in an exchange filing.
The increase in the MCLR by BoB for July was steeper compared with June, when the bank had raised the one-year MCLR by 10 bps. The bank has kept overnight and one-month MCLR unchanged at 6.80% and 7.20% respectively. The 3-month and 6-month MCLR have been raised by 10 bps each to 7.35% and 7.45%, respectively.
Meanwhile, Bank of Maharashtra reduced its MCLR by 20-35 bps across tenures. The bank cut its one-year MCLR by 20 bps to 7.50% in July from 7.70% in the previous month. The bank’s one-year MCLR for June was one of the highest among public sector banks, according to RBI data. The bank’s shorter duration MCLRs for July are in the range of 6.90% to 7.40%.
In FY22, the bank’s deposits stood at Rs 2.02 trillion while current account, savings account (CASA) ratio as of March 31 improved to 58% compared to 54% a year ago. Cost of deposits declined to 3.61% in Q4FY22 from 3.97% in the same quarter last year.
The move comes at the time when most banks have been increasing their MCLR after the Reserve Bank of India initiated a rising policy interest rate cycle.
Earlier, HDFC Bank and ICICI Bank hiked MCLR by 20 bps each.
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The IBA has invited bids from advisory firms and institutes to design and deliver a leadership development programme for public sector banks (PSBs) to prepare a pipeline of leaders in tune with the increasing competitive landscape.The selected entity will design and deliver the training programme for senior officers of PSBs, including chief general managers (CGMs), general managers (GMs) and deputy general managers (DGMs).
The training programme can be delivered through three modes — online as e-learning modules, online through live webinars/meetings and through in-person mode, a public notice said.The objective is to develop future generation of leaders who are digitally savvy, strategic thinkers with capability to build highly collaborative teams and create customer-centric organisations that thrive in a very dynamic competitive environment, it said.
“The Indian Banks’ Association (IBA) has been requested by the Financial Services Institutions Bureau (FSIB) to appoint an Agency/ Firm/ Institution to design and deliver a leadership development programme for Public Sector Banks in India,” it said.The FSIB is an autonomous body of the Government of India. The mandated objectives of the Bureau include training and development of managerial personnel in nationalised banks and financial institutions in the public sector.The FSIB aims to provide best-in-class training and development opportunities to the senior management
of PSBs.
The programme aims to groom business leaders of the PSBs who shall be ready to assume top management and board-level positions and to drive long-term sustainable business in a competitive market place, it said.The bidder is expected to have proven abilities to design, develop and deliver such a programme, including online e-learning modules on a standard Learning Management Solution (EDX, Coursera etc), it added.
The bidder will be selected under the Quality cum Cost Based System (QCBS) with weightages of 80:20 (80% for technical proposal and 20% for financial bid). The last date for submission of bids is July 30. The pre-bid meeting will be held on July 16.
With inputs from PTI
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India's retail inflation likely held steady in June, but well above the Reserve Bank of India's tolerance limit for a sixth month as lower fuel and cooking oil prices offset higher services and food costs, a Reuters poll found.
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Following delays in transfer of loans of telecom infrastructure provider GTL to the bad bank, lenders have now invoked the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act to recover their dues. The recovery action has been initiated by IDBI Bank on behalf of lenders, whose total exposure to GTL stood at Rs 7,250 crore as of December 31, 2021.
Bankers FE spoke to said that it makes more sense to pursue recovery by all means possible rather than to wait for the full operationalisation of the National Asset Reconstruction Company (NARCL).
“It has been a long time since the original list of assets was drawn up. It’s only natural for banks to pursue all means at their disposal to recover what they can,” said a senior banker. Similarly, other accounts that were intended for sale to NARCL in the first tranche have been appearing on the lists of non-performing assets (NPAs) circulated by banks for sale to asset reconstruction companies (ARCs).
Names like VOVL, Jaypee Infratech, Meenakshi Energy, Consolidated Construction Consortium, Sion Panvel Tollways, Supreme Panvel Indapur Tollway, Helios Photo Voltaic, Chhapra-Hajipur Expressways, Mittal Corp, Worlds Window Impex and SSA International feature on the list of 168 accounts State Bank of India (SBI) has drawn up for sale to ARCs during the current year. These 11 accounts owe SBI an aggregate Rs 9,186 crore.
Bankers said that the original list of 15 assets with an exposure of Rs 50,000 crore is bound to undergo revisions. In May, Mint had reported, citing unnamed sources, that 20% of the NPAs identified for transfer to the NARCL, amounting to Rs 40,000 crore, had already been resolved.
Meanwhile, NARCL is counting on its sole bid for the loans of Rainbow Papers to avert a renewal of its ARC licence, which was valid till June 30. It has written to the Reserve Bank of India (RBI) to consider the bid as a mark of operationalisation of the bad bank. It is not yet clear if the central bank has responded to the request.
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The State Bank of India (SBI) is said to join the syndication process that already has confirmed participation from Mizuho Bank, MUFG and Standard Chartered Bank, the people cited above said.
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Gross non-performing assets (GNPAs) of banks have hit a six-year low of 5.9% as of March 2022. But India’s NPA ratio is one of the highest among comparable countries, says a report. Barring Russia, which has bad loans of 8.3%, every large market has bad loans below India. China has NPA ratio 1.8%, while it is 2.6% for Indonesia and 5.2% for South Africa. Most of the developed economies have NPAs below 3%.
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Almost all analysts expect credit growth for the banking system will be upward of 12%, largely driven by private banks. Net interest margins (NIM) could also inch upward of 3% largely due to better net interest income and an upward interest rate cycle.
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The training programme can be delivered through three modes -- online as e-learning modules, online through live webinars/meetings and through in-person mode, a public notice said.
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Industry body IBA has invited bids from advisory firms and institutes to design and deliver a leadership development programme for public sector banks (PSBs) to prepare a pipeline of leaders in tune with the increasing competitive landscape.
The selected entity will design and deliver the training programme for senior officers of PSBs, including chief general managers (CGMs), general managers (GMs) and deputy general managers (DGMs).
The training programme can be delivered through three modes — online as e-learning modules, online through live webinars/meetings and through in-person mode, a public notice said.
The objective is to develop future generation of leaders who are digitally savvy, strategic thinkers with capability to build highly collaborative teams and create customer-centric organisations that thrive in a very dynamic competitive environment, it said.
“The Indian Banks’ Association (IBA) has been requested by the Financial Services Institutions Bureau (FSIB) to appoint an Agency/ Firm/ Institution to design and deliver a leadership development programme for Public Sector Banks in India,” it said.
The FSIB is an autonomous body of the Government of India. The mandated objectives of the Bureau include training and development of managerial personnel in nationalised banks and financial institutions in the public sector.
The FSIB aims to provide best-in-class training and development opportunities to the senior management of PSBs.
The programme aims to groom business leaders of the PSBs who shall be ready to assume top management and board-level positions and to drive long-term sustainable business in a competitive market place, it said.
The bidder is expected to have proven abilities to design, develop and deliver such a programme, including online e-learning modules on a standard Learning Management Solution (EDX, Coursera etc), it added.
The bidder will be selected under the Quality cum Cost Based System (QCBS) with weightages of 80:20 (80 per cent for technical proposal and 20 per cent for financial bid).
The last date for submission of bids is July 30. The pre-bid meeting will be held on July 16.
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By Shubhangi Shah
Banking is already on our fingertips via mobile phones. The next leap of technology promises to bring a human touch to the digital experience with virtual interactions in the metaverse. Like what Union Bank of India did on Friday by launching its metaverse virtual lounge, through which customers can visit a bank without actually visiting the bank. As the bank’s chief technology officer (CTO) Rajiv Mishra told FE, “You choose a digital avatar for yourself, enter the bank lounge and access the available banking services. Currently, we are giving informative services through which customers can seek details on social security services, loans and other banking products,” adding that the service can be availed on both desktop and through virtual reality headsets.
With this, the bank has joined international and foreign banks such as JP Morgan Chase, HSBC and South Korea’s Kookmin Bank, which have already made strides into the metaverse.
Digital banking is set to become bigger, which will not only allow for remote access to services, but add a personal touch, as Rajesh Mirjankar, CEO of Kiyaverse, India’s first metaverse banking platform, explained. Launched by digital service provider firm Kiya.ai last month, Kiyaverse has witnessed keen interest from private and public sector banks and NBFCs (non-banking financial companies).
Pointing out what sets this new technology apart from the existing one, like mobile banking, Mirjankar said, “While digital banking is functionally interdependent and inclusive, it is all too often seen as being emotionally detached. The metaverse allows banks to use cutting-edge technology with a human touch that will significantly deepen and personalise customer interaction. It is an opportunity to restore the dialogues lost in digital channels.”
Sonali Kulkarni, lead, financial services at Accenture India, feels the same.
“Besides its potential regarding product and service innovation in payments, investment, insurance and loans, the metaverse is an opportunity for banks to foster deeper customer connects,” she said, adding, “It can help restore the in-person dialogues that are currently missing in digital channels and help create memorable experiences for the next generation of banking customers, many of whom may never need to step into a bank branch in their lives.”
Both Kiyaverse and Union Bank’s metaverse work on similar technological lines involving virtual reality and digital avatars. Right now, the Union Bank is “not going into the next phase where transactions and other services can be provided,” said the bank’s CTO, explaining that there are security and regulatory aspects that need to be taken care of.
Mirjankar also admits that the banking industry is still at a ‘nascent’ stage in the metaverse and that banks must consider adopting immersive technologies “for the future of business”.
Similarly, Kulkarni said as the world is moving ahead, “banks in India need to start evaluating their technological readiness for the metaverse, develop prototypes to help their employees understand its potential, and finally get ready to scale these prototypes rapidly.”
Emphasising ‘trust’, she terms it ‘paramount’ to the adoption of new experiences and that the metaverse must be developed with responsibility at the core – concerning ownership of data, security, inclusion and diversity, risk management, and other parameters.
Speaking about the need for a talented and skilled workforce, she said, “Just as banks need to cultivate digital, data, and cloud skills in their workforce to enable digital-native business models, they will need to hire talent or build skills for a future driven by the metaverse.” These include 3D artists, game designers, platform experts, and professionals with expertise in multiple blockchains.
Meanwhile, on being the earlier ones in India to launch into the metaverse, Union Bank’s CTO said other banks will be coming up with the same soon. “It is just a matter of days. Today, it was us who did it, tomorrow you will find others,” he said.
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Inflation may ease gradually in the second half of 2022-23, Reserve Bank of India governor Shaktikanta Das said on Saturday, asserting that the central bank will continue to calibrate its policies with the goal of preserving and fostering macro-economic stability.
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