New Delhi
Indian banks and financial institutions need to wake up and shake up, says Mr Uday Kotak, Founder & Director, Kotak Mahindra Bank. “What will happen if Google is allowed a bank tomorrow,” he asked while addressing the audience at a ceremony commemorating the 68th Foundation Day of All India Management Association (AIMA) on 21 February.
Financial institutions of tomorrow will be technology-powered risk management companies that are customer centric, he predicted. “The future competition is Google, Meta, Apple, and Amazon,” he said.
Talking about India moving towards capital convertibility and making Indian rupee a reserve currency, Mr Kotak said that India can make its rupee a reserve currency provided it reaches a macroeconomic stability that allows the world to trust India with keeping others’ money safe. “If we manage our fiscal and current account and establish institutional processes that others can trust, we would have the foundations for a reserve currency,” he said
Mr Kotak suggested that India could experiment with rupee’s convertibility by opening a window of convertibility for both trade and investment in the GIFT City. “See how it goes and gradually make it easier for Indians to move the currency in and out,” he said.
Mr Kotak welcomed the introduction of the central bank digital currency (CBDC) by the RBI. He said that it could be a big positive and change the way finance works in the country. He said that banks will still be needed as intermediaries and for risk management, a role that they has been the heart of the financial services sector
Talking about crypto currencies, Mr Kotak said that he does not understand or like the cryptos, but he pointed out that cryptos are like gold and derive their value from a shared belief in their value despite there being no logic in it.
On the role of the finance sector in making India a $30 trillion economy, Mr Kotak said that India’s regulators need to encourage more innovation and go from cautious regulations that block growth to those that ensure fast correction and recovery from any mishap. “Zero accident policy is also dangerous,” he said.
Speaking on the occasion, Mr Sanjiv Bajaj, Chairman and Managing Director, Bajaj Finserv Limited, pointed to the government’s leading role in digital transformation of the business. He said that the account aggregator network launched by the government now allows lending companies to see the borrower’s income, spending and existing loans at one place while such information used to be spread across the borrowers’ various bank and loan accounts.
The national health registry is another such government effort to aggregate the citizen’s data for use by the private healthcare industry, Mr Bajaj pointed out. He said that everybody who signed up for CoWin to get covid vaccination was registered and has a unique digital health card. He said that Bajaj group processes about 150,000 insurance claims a month based on the health records in the Digital Locker database using AI tools. He said that Bajaj Finserv has set up a new company to aggregate information on clinics, hospitals, mental health providers, gyms, yoga classes to facilitate creation of insurance-linked products. The company has introduced insurance cover for OPD consultations where the doctors are willing to share details of patients’ calls, prescriptions and reports on the company’s mobile phone app.
Dr R A Mashelkar, Former Director General, Council of Scientific & Industrial Research talked about inclusive innovation as a public service. “There are all kinds of inequalities and we need innovations that dismantle inequality,” he said.
Dr Mashelkar gave the example of portable ECG developed by a young Indian innovator to help someone in his family and stressed that affordable excellence in the key for India. “Making high tech work for the rich is easy, but making it work for the poor is difficult,” he said.
The programme included presentation of AIMA’s Foundation Day Awards. Minister of Education, Mr Dharmendra Pradhan presented the AIMA Life Time Achievement Award for Management to Mr Uday Kotak, the AIMA - JRD Tata Corporate Leadership Award to Mr Sanjiv Bajaj and the AIMA Public Service Excellence Award to Dr Mashelkar.
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