V Vaidyanathan, the MD and CEO of IDFC First Bank, during an interview at BT500 Wealth Creators Summit with Sourav Majumdar, Editor of Business Today, provided insights into India's financial journey towards becoming a $5-trillion economy.
V Vaidyanathan shared his transition from a career banker to an entrepreneur, emphasising on the changing perception of entrepreneurship in India as a positive force for employment and economic growth. He said, "The lens with which we see entrepreneurship in a positive way now, I think is the biggest change that has happened in the last few years."
Reflecting on the past, V Vaidyanathan highlighted the positive shift in how entrepreneurship is perceived today compared to previous decades, citing factors like tax contribution and economic growth.
V Vaidyanathan also highlighted the transformation in how governance, leadership quality, and infrastructure have significantly contributed to India's economic growth. "No company had a market cap of more than Rs 1,000-2000 crores, 20-30 years ago. Suddenly now we have market cap of three lakh crore, five lakh, six lakh crore, ten lakh crore and due to this corporate governance is becoming a really big deal," he said.
Discussing the evolution of infrastructure financing, Vaidyanathan outlined the positive changes, including improved project clearances and the entry of international players due to India's positive narrative. He said, "Even our bank was set up to finance infrastructure. It is called IDFC, Infrastructure Finance Development Corporation," he said.
V Vaidyanathan stressed the pivotal role of India's Digital Public Infrastructure (DPI) in the financial sector, illustrating how IDFC First Bank extensively utilises digital infrastructure for various banking processes.
V Vaidyanathan provided examples of how digitalisation has transformed the banking sector, from digital KYC to online agreements and digital monitoring, enhancing efficiency and reducing project risks.
Acknowledging the challenges faced by MSMEs, Vaidyanathan discussed how digital financing has alleviated some of these challenges, making the lending process more accessible and efficient.
V Vaidyanathan shared success stories in agriculture financing, highlighting how loans for agricultural purposes, including livestock and water-related projects, have positively impacted rural communities with low delinquency rates. He said: "You will not believe the typical ticket size loans are two lakh, three lakh rupees. The economics of a cow or buffalo typically comes back in about 7 or 8 months. They get the full money back and after that, whatever the cow produces, is for free and our collection percentage is 99.7% in that portfolio, gross NPA is 1.2%, net NPS 0.3%."
The discussion touched upon the competitive landscape in the financial sector, emphasizing the need for more players to meet the growing demand for credit in India.
Reflecting on recent reforms, V Vaidyanathan commended the government's efforts in implementing GST and IBC, enhancing corporate controls and bringing about positive changes in the financial sector.
In closing, V Vaidyanathan expressed the importance of continuous reforms, focusing on cybersecurity and operational risk management to sustain India's economic growth trajectory. He said, "How will India become a 5 trillion economy? How will India become a $10- economytrillion? 20 banks cannot make it so. I'm raring for the day when India becomes a $10-15 trillion economy. By 2030, we will be $7-trillion economy. But who will finance it? I believe that current model is good, but more is better."
Produced by: Tarun Mishra Designed by: Manoj Kumar
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