`The technology usage especially data analytics, Artificial Intelligence (AI), and machine learning can help improve the quality of assets.
Chief Economic Adviser K V Subramanian today said that the financial sector has to lead the growth and it has miles to go before it sleeps. K V Subramanian added that no country has been able to grow fast over a long period of time without its financial sector leading the growth. CEA Subramanian further said that the Indian financial sector is like the 1990s cricket team which could write a lot about its domestic achievement, but not much when it went outside. Speaking at an event organised by industry body FICCI, he also noted that India has only one bank — SBI — in the global 100, which also illustrates how far India’s financial sector has to go. For the fifth largest economy, the Indian financial sector cannot be punching so below its weight.
K V Subramanian further said that while regulators are mandated to monitor, at an individual level, every NBFC needs to monitor its rollover and inter-connectedness risks. Forbearance is necessary during this time but zombie lending can come back to bite later, he added.
Technology in financial sector
Highlighting the importance of technology in the financial sector, CEA Subramanian said that reforms in farms and the manufacturing sector enable NBFCs to lend in a large way to the primary and secondary sectors of the economy. However, the sector will not be able to avail of these opportunities in a stable and sustainable manner without the use of technology. The technology usage especially data analytics, Artificial Intelligence (AI), and machine learning can help improve the quality of assets and its usage can be far higher in the financial sector, he further said.
Speaking about the opportunities in the financial sector, K V Subramanian said the Bilateral Netting of Qualified Financial Contracts law that has been passed recently paves the way for credit derivatives. He added that a bunch of reforms undertaken by the government in the agriculture and manufacturing sector also provide opportunities to the sector. Meanwhile, the CEA pointed out that the Indian financial sector is like the 1990s cricket team which could write a lot about its domestic achievement, but not much when it went outside.