The RBI has focused its attention on strengthening credit delivery systems and incentive mechanisms in select sectors such as small and medium enterprises (SMEs), agriculture and small-scale industries (SSIs). These sectors have seen growth recently and availability of timely credit will further boost this trend. Credit delivery can be improved considerably by introducing cost-effective and technology-based distribution networks and in many ways a modified application of the retail-financing model could be key to servicing the financial needs of these less-penetrated but critical sectors at affordable costs.
The Policys focus on technology is welcome, and it has recognized the important role that technology has played in bringing efficiencies and enabling growth in banking.
The Policy has also paid attention to the financing of the infrastructure sector, which has witnessed greater flow of bank credit recently. This would be further augmented once we are able to develop long-term secondary debt markets, which will enable banks to fund the long-term infrastructure projects more efficiently.
On the regulatory front, the RBI has continued with its policy of moving the Indian banking system to higher levels of transparency, international prudential benchmarks and more efficient risk management norms. This is a move in the right direction as it seeks to make Indian banking globally competitive.
KV KAMATH, MD & CEO, ICICI Bank