2018-19 was the year of hope and FY21 will be a year of happiness, said Rajnish Kumar two years back. In a recent interview with ETBFSI, Rajkiran Rai, MD&CEO of Union Bank CMD said, “2020 will be positive. We have already hit the bottom.”
1. Rise of Credit Growth — According to a BCG report, retail banking will grow rapidly in 2020. Mortgages to grow fast and will cross Rs 40 trillion by 2020. But currently, the credit demand is low on both corporate and retail sides. RBI has assured that India’s financial system is stable despite weak growth and projected that demand will rise in 2020. But according to ratings agency ICRA, the credit growth in 2020 will be 50 years low. Major sectors such as auto, real estate are down and banks took cautious calls by preserving the liquidity. What gives hope in 2020 is that the government’s affordable housing scheme, reduction in corporate tax, GST tax revision, RBI’s 134 bps rate reduction and finance ministry’s push to empower bankers. This will certainly help to boost credit growth.
2. Recovery from Bad Loans: IBC & NCLT — Bankers will carry the baggage of bad loans in 2020 as well. IBC has made debtor responsible and bankers are feeling strong like never before. Despite being a special law and deadline to close the cases, resolution is not easy. Currently, as per NCLT data, more ..
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