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  1. Demonetisation hurried up this big transformation in India; what they said

Demonetisation hurried up this big transformation in India; what they said

Bankers on Monday said that demonetisation has sped up the pace of digitisation and has also led to a formalisation of financial savings.

By: | Mumbai | Published: November 7, 2017 4:13 AM
(Left to right) SBI chairman Rajnish Kumar, Punjab and Sind Bank chairman and managing director Jatinderbir Singh and ICICI Bank MD & CEO Chanda Kochhar at the FIBAC 2017 meet in Mumbai on Monday. (Nirmal Harindran)

Bankers on Monday said that demonetisation has sped up the pace of digitisation and has also led to a formalisation of financial savings. Speaking at the sidelines of the FIBAC banking conference in Mumbai, ICICI Bank MD & CEO Chanda Kochhar said that there has been a large formalisation of financial savings and increase in the flow to mutual funds and insurance space. “And another is the shift in digitisation at faster pace. Going forward, the whole approach towards digitisation will continue,” she said. Kochhar added that while the formalisation of financial savings takes place, the ability of the banks and financial services to reach in a more penetrated manner to small customers also needs to continue. “It (demonetisation) has been a positive movement in formalisation of financial services,” she said. Meanwhile, State Bank of India (SBI) chairman Rajnish Kumar said that he considered demonetisation positive for the banking sector. “I would consider it positive in the sense that money has flown into the formal banking system and all banks have seen their current account savings account (CASA) deposits go up by around 250-300 basis points (bps), which itself is a big positive,” he said. SBI’s CASA ratio stood at 42.74% in Q2FY17 and rose to 45.58% in Q4FY17.

Kumar said that now, after the impact of demonetisation, which was short-lived and the goods and services tax (GST) reforms, he could only see an improvement of the economy. “These (green shoots) are all sector-specific, certain sectors are seeing lot of action and certain sectors need to see some more action. We are seeing lot of action in the renewable energy space, we are seeing lot of action in the road infrastructure, ports and there are a couple of sectors where some more improvement is required,” he explained.

The power sector, Kumar said, was one of the stressed sectors where things need to definitely improve. “In the last one year there has been a tremendous improvement in the steel sector. I think, a little bit of patience is always required in such matters but the temporary negative impact of the sweeping changes are now past us,” he added.

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