Government asks banks to collaborate with NBFCs and Fintech firms, says official

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

Speaking at a CII event here on Friday, Hardik Mukesh Sheth, Director (Banking Operations) of the Financial Services Department, said the government is pushing public sector banks (PSBs) to work with NBFCs and fintech companies. to collaborate in the field of co-lending.

He also said there was also a push towards the digital path, adding that new era banking using technology had increased.

“There is an increase in loan disbursements through the digital channel,” Sheth said.

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

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

According to Kumar, fintechs can help banks increase their efficiency and collaboration between them can be a step forward in increasing lenders’ credit.

Managing Director of State Bank of India (SBI), Global Market International, C Sreenivasulu Setty said it was important to combine trust from banks and technology from fintech companies to serve customers.

“It has to be sustainable. Banks are spending money to solve this problem,” he added.

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