5 Key Reforms India’s Banks Must Implement for the Viksit Bharat 2047 Mission

In the Interim Budget 2024 Finance Minister Nirmala Sitharaman mentioned that the government is moving toward Prime Minister Modi's vision for Viksit Bharat by 2047. The vision of Viksit Bharat is all-pervasive, all-round, and all-inclusive for which the government will be focusing majorly on the Poor, Women, Youth, and farmers.

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The 24-25 budget was set as a Roadmap to the vision of Viksit Bharat by 2047. During the budget announcement, the Finance minister capitalized on

• Productivity and Resilience in Agriculture
• Employment and Skilling
• Inclusive Human Resource Development and Social Justice
• Manufacturing and Services
• Urban Development
• Energy Security Infrastructure
• Innovation, Research and Development
• Next Generation Reforms

“One of the primary objectives of the banking industry is to ensure financial inclusion, creating opportunities for every individual to grow and contribute to the nation’s progress. To fuel inclusion and credit growth, we must continue to innovate and reimagine our deposit strategies, aligning them more closely with the evolving needs and preferences of our customers. This growth will be aided by the full potential of our workforce which must be harnessed using digitization and emerging technologies like GenAI,” said MV Rao, chairman of the Indian Banks’ Association

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Some reforms are needed in the banking sector to succeed in the vision of Viksit Bharat by 2047:

Adopting new operating models

The landscape of the Banks in India is shifting banks are becoming Capital markets rather than pension-saving piggy banks as retail lending in India is expanding but despite all these Indian banks are still stuck in their old ways and are not changing as fast as they are supposed to. Banks should indulge in innovating several products according to their consumers' new needs ew deposit pools for targeted lending, as banks continue to play a key role in funding large-scale projects and sectors

Retaliating against challenges

As we read earlier retail lending is spiking but the growth comes with many more challenges to tackle with unsecured lending increasing in the meantime with a ratio of 30:70 in India. Inia has a large population a major population of India is non-formal earners and outside of formal financing channels. Lenders will have to re-imagine the operating model and underwriting capabilities to serve this segment.

Banks need to take the Initiative

India has revolutionized their monetary infrastructure but the banks are not as innovative as the other banks globally. Indian banks need to be innovative and create better customer service and security.

Banks should invest more in digital funnel growth

Indian banks both private and public have scored higher than other banks globally for related to customer experience. banks still need to monetize digital opportunities across other dimensions like product fulfillment journeys and money insights.

Banks should plan for the future

Indian banks are experiencing a new era of opportunities, banks should plan how to use them to the fullest of their capability. Resilience must extend beyond technology to encompass entire business processes.

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