BT Banking & Economy summit: From Dharavi to BIMARU, finance experts urge banks to look beyond metros

From Dharavi to the BIMARU (Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh) states, experts believe that there are numerous opportunities in India for small and large banks at large. 
 
Speaking at Business Today’s Banking and Economy Summit 2023 on Friday in Mumbai, banking experts said the Indian banking ecosystem hasn’t scaled to that extent and competition is not a problem. This means that there is room for the existing players to grow more. How? By tapping into the Tier II, and III cities and beyond. 
 
India which underwent a turbulent time of two-and-half years of the COVID-19 pandemic realised the importance of the less developed regions when people migrated from metros to these cities. Sanjay Agarwal, MD, and CEO of AU Small Finance Bank said that there is no competition for banks in cities beyond Mumbai, Bengaluru, and Delhi. 
 
Rishi Gupta, MD, and CEO of Fino Payments Bank, however, pointed out that within Mumbai, there are huge opportunities in underdeveloped regions like Dharavi and Dombivli.
 
He said the number of ATMs or branches is less in such areas where income and awareness (of digital banking) are low which banks should identify and explore. He also added that the large migration from metros to Tier III cities and beyond led to many people becoming their customers during COVID-19.
 
Perhaps, this is why it is not difficult to fathom why BIMARU states are the biggest growth drivers for Fino. “Lack of banking and infrastructure was an opportunity for us to set up our businesses there (in BIMARU states),” he said. Even the eastern or north-eastern part of India presents a huge scope, he added. 
 
“Today a customer has many choices to make transactions. He can go to the bank or do it digitally using the app,” Gupta stated.
 
Anubrata Biswas, MD & CEO of Airtel Payments Banks, echoed Gupta’s point and gave Airtel’s example to elucidate this point. He said that of the 350,000 banking points Airtel has all over India, 60 per cent of them are located in Tier V cities and beyond. 
 
Gupta concluded by saying that this is a major accomplishment for India, he said, because when the COVID-19 pandemic struck, everyone was worried about carrying out banking activities safely and securely. 
 

Also Read: BT Banking & Economy summit: Here's how COVID-19 altered India's small finance banks' landscape