Govt For Banks To Collaborate With NBFCs And Fintech Companies, Says Official

The government is in favor of banks working closely with the non-banking financial companies (NBFCs) and fintech companies for co-lending and also push forward the digital route, an official said.

Speaking at a CII event here on Friday, Hardik Mukesh Sheth, director (banking operations) of the department of financial services, said that the government is pushing the public sector banks (PSBs) to work with the NBFCs and fintech companies to collaborate in the area of ​​co-lending.

He also said that there is also a push towards the digital route, adding that new-age banking using technology has increased.

“There is a rise in loan disbursement using the digital channel,” Sheth said.

The official said that all the 12 PSBs are making profits, and their non-performing assets (NPAs) have halved due to recovery. “None of the 12 public sector banks are under the prompt corrective action (PCA) of the RBI,” he said.

Echoing the same, MD&CEO of Yes Bank Prashant Kumar said that NBFCs are critical not only for financial inclusion but also for raising credit offtake. He said fintechs are able to understand customer behavior while the banks enjoy their trust.

According to Kumar, fintechs can help the banks in raising efficiency and collaboration between them can be a way forward on increasing credit of the lenders.

MD of State Bank of India (SBI), international global market, C Sreenivasulu Setty said that it is important to combine the trust of the banks and technology of the fintech companies to serve the customers.

“This has to be on a sustained basis. The banks are spending money to address this issue”, he added.

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