Mumbai: Dr Krishnamurthy Subramanian, Chief Economic Adviser, said that implementation of Fintech can help public sector banks to leapfrog as it can provide scale and improve the quality of lending, especially to large corporates. He added, it has been seen that Fintech can reduce NPAs even while enhancing lending volumes.

Dr Subramanian said that the most important aspect of economic growth is the banking sector and India lacks in this area. In the Economic Survey, India only has one bank listed in the global top 100 banks in 2019; hence, the emphasis should be on making the banking sector globally-scaled and Fintech can play a vital role in it.

Highlighting the importance of technology, Dr Subramanian said that technology can play a pivotal part in helping the banks to achieve both scale and quality. Banks can employ artificial intelligence, machine learning and data analytics to identify willful defaulters. These technologies can also help in capturing the willingness to repay by the lenders as well.

COVID-19 and global financial crisis highlighted the significance of ethical wealth creation and self-reliance (Atmanirbharta). For achieving self-reliance, India needs cutting-edge capabilities and capabilities cannot be built without competition. Capabilities are built by utilizing comparative advantages and India’s comparative advantage lies in its large domestic market.

Indian firms can craft their products and services by catering to the entire market, not just the richest 25%. Correct price points and volumes can help in reaching to people at the bottom of the pyramid as they also aspire to consume products availed by the affluent.

Speaking about the role of market, Dr Subramanian said that we cannot undermine the importance of market. COVID-19 and global financial crisis brought to light the limitations of the market and it was seen that markets do not work 5-10% of the times. He added that in such times, we need to be self-reliant to avoid potential vulnerabilities.

we need to recognize the importance of trust as COVID highlighted that there are times when markets do not function. These are the times when trust in the economy is needed, and it is a broad idea which brings in governance.He added that economies that adhered to the principles of good governance have done well.