Experts share prospects for growing consumer confidence and the retail lending industry
The global pandemic surprised everyone and caused major disruption to economies around the world. While India was already on the path to digitalization, its pace has accelerated, with all key sectors turning to digital support for business operations. The banking and financial sector has also accelerated the adoption of digital tools for disbursing loans, credit cards and for online transactions.
At India Revival Mission eForum, a prominent panel converged to reflect on various aspects of the retail lending industry – Recovery from the pandemic and the impact of digitization – Shifting the loan application process from offline to online; Impact of the moratorium on loan repayments; Future prospects for the personal loans and retail repayments industry.
For the economy to catch fire, it is very important that consumer confidence and consumption get back on track. The discussion focused on the very relevant question of “How will the prospects for growth in consumer confidence and personal loans be realized”.
Experts such as Saloni Narayan, Deputy Managing Director – Retail, State Bank of India; Bali Summit, President and Head of Personal Loans, Axis Bank; Sanjay Kumar Agarwal, senior manager at CARE Ratings; Sanjay Doshi, Partner & Head, Financial Services Advisory Leader, KPMG India shared their valuable insights, and the discussion was moderated by Sumiit Lakhoutia – Anchor, Times Network.
Speaking on the Role of digitization in restoring consumer confidence in the banking sector after confinement, Saloni Narayan said: “The pandemic has really made digital history very difficult. Everything we have achieved during this time has been greatly contributed by digital adoption. “She adds:” Over the past year (early April 2020) we have increased by approximately INR 70,000 crore in the fair Personal loan Category. Looking at the trend, we see that on the INR 2.20 crore portfolio in Express credit, 38% were provided by digital.
Ms Narayan also referred to other digital initiatives such as electronic stamping, digital documentation, etc., which have simplified loan disbursement and other operations. She informed participants that SBI has engaged with state governments and National e-Governance Services Ltd. (NeSL) to facilitate loans without the customer having to contact the bank. While branches are open to customers, banks are encouraging people to go digital for their lending needs.
Analyze how digital banking has influenced consumer confidence, Bali Summit said: “At Axis Bank we are still betting on digital, but what happened during the pandemic is that digital has had a boost. So we really saw a step forward and as our business grew quarter over quarter we had the highest business ever done digitally. Almost 50-70% of our credit card loans and sales are done digitally. In fact, 90 to 95% of our overdrafts (OD) are done digitally. “
He added that in the future this trend will continue and this is certainly a positive thing as it gives the customer the choice to transact 24×7 and 365 days a year, in a very transparent and efficient manner. In addition, it is a win-win situation for the bank and the customer.
Deciphering the impact of the pandemic and subsequent locking of personal credit scores, Sanjay Kumar Agarwal said: “With most loan programs being run by banks, the focus is on the individual credit bureau score, as this becomes a threshold for deciding whether or not to accept credit and grant benefits. such as interest rate, etc. that the consumer would want from the lender. He further explained that during the pandemic, credit ratings have become of paramount importance for maintaining asset quality and the lender-borrower relationship.
Assessing consumer appetite for home loans after confinement, Sanjay Doshi said, “Even before the pandemic, the financial services industry, especially NBFCs, was going through challenges. However, the retail sector has not been affected in terms of NPA or other constraints. As for borrower behavior, it has always been successful in the retail sector. The past year has been an unexpected year for everyone, and with the government and regulator giving out plans around a moratorium and one-off restructuring – things have been better and under control. The whole credit score card and credit bureau played a positive role and really helped the recovery. “
The panelists also shed light on various other issues such as, if consumer confidence starts to rebound; Has India overtaken credit cards with advanced digital payment technologies; Outlook for Growth Prospects for India’s Retail Lending Industry; Future prospects for the history of consumption in India, to only cite a few.