banking is one thing that makes a great difference in any country’s economy. What do you think banking would be in India in this current year? No wonder that the last year of the decade got to an end with dramatic modifications in the banking sector. Right from merger of banks to the liquidity disaster, and low credit demand to the huge defaults. Bankers have actually gone through various challenges and changes. Will the condition change in this current year 2020? Will banks turnaround in this year? If you read about banking news today and you do it every day; you would stay updated about everything that is happening and tend to happen in banking field.
1. Retrieval from Bad Loans:
IBC & NCLT — Bankers are going to luggage of bad loans in the current year as well. IBC has made borrower responsible and bankers feel strong like never before. In spite of being a special law and deadline to close the cases, resolution is not convenient. The point is in the present time, according to NCLT data, more than ten thousand cases under the realm of IBC are pending before NCLT. The backlog of NCLT is going to continue in 2020 too. the point is, it has been said that, if there would be more defaults, more cases are going to be filed in NCLT and Banks shall not have any other option but to wait and pray for resolution.
2. Increase in Credit Growth
As per a BCG report, retail banking is going to enhance immensely in this current year 2020. Mortgages would get fast and will cross Rs forty trillion by 2020. But presently, the credit demand is somewhat on the downside on both corporate and retail sides. RBI has made sure that the financial system of India is stable despite weak growth and predictable that demand will rise in 2020. But then there are also assumptions that the credit growth in this year will be fifty years low. Main sectors such as auto, real estate is down, and banks would take cautious calls by conserving the liquidity. What might get hope in 2020 is that the affordable housing scheme of government, diminishing in corporate tax, RBI’s 134 bps rate reduction, GST tax revision and even that of push of finance ministry to vest bankers. Such a thing would surely enhance the credit growth.
3. PSB: Fusion execution and stake reduction
You know merger of PSBs was one of the brave decisions that the government took in last year 2019. They merged ten banks into four and the complete number of PSBs diminished from twenty-seven to twelve. Financial experts have seconded the idea of merging banks but here the question is how shall they execute?
The government has actually recapitalised banks but the modification in management, issues regarding infrastructure, transfer of senior officers are in under process. Even the government is slow in employing the heads of the PSB’s. What is actually more significant to see in 2020 is how the performance of the merged banks turn out to be. What shall also drive the PSBs in 2020 is if the government diminishes its holding in PSBs to fifty one percent or what.
4. Enhancing Customer Service
In the current time, for banker’s asset story is actually painful, hence these are concentrating more on deposits. In the current year bankers are going to have to find innovative ways to fascinate customers and more significantly improve their customer service. Bankers are already making use fancy words like that of ‘customer experience,’ ‘customer delight’ to fascinate customers, but it would be good if they adopt the same. Customers expect banking must be as unified as booking a taxi and ordering food. Most of the banks are trying their best to form up innovative UI and UX for the mobile applications. In 2020, retail banking is going to be driven by customer service.
5. Presence and Working of Private banks
Building business, private banks have alone gone through challenging times. The main private banks like that of ICICI Bank, Axis Bank, and even that of Yes Bank underwent a big reshuffle. All three banks got fresh CEOs. Even, the CEO of HDFC is going to retire in October 2020. Every private bank possesses a different tale. In this current year of 2020, it is critical to see how these banks deal with the NPAs, raise funds and even produce credit demand. The main challenge for the fresh management in the banks is to make a maintainable and profitable business.
6. Partnership and collaborations
Financial technology has made a great difference in banking and finance space. in the starting, there was an anxiety that it will eat the lunch of banks. But slowly t has begun partnering with banks. Nearly all the banks have partnered with FinTechs. It is bringing in the innovation that banks might not have done. In 2020 banks are going to partner with market forces beginning from FinTechs to E-commerce troupes for diverse segments of their companies and businesses.
7. Innovations in the year 2020
Banking and the financial area are the flag bearer of innovation in technology. Right from the task of payment transfer to that of getting the loans is somewhat easy on mobile apps in the present time. In 2020, technology innovation in banking is going to significantly concentrate on voice and video banking. In the present moment, bots are getting used to serve the customers, but these are still not up to the mark. Professionals are of the belief that most of the technologies is going to mature in 2020. Mainly on the technology front, Open API is going to be well accepted in the realm of banking sector in 2020. Even Data and Analytics, Cognitive Technology, Artificial Intelligence, Blockchain Technology, Robotics Process Automation are going to be massively accepted by banks and that of financial institutions. The year seems to be a technology oriented one for banking and financial sector.
Conclusion
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