'Corporates are investing through cash accruals'

Cash is not going out to repay bank loans, but to fund the business, says K.V. Kamath

- Ranjani Raghavan

Veteran banker K.V. Kamath, 76, the former chief of BRICS countries’ New Development Bank and known primarily as chairman of National Bank for Financing Infrastructure and Development, spoke at the Mint BFSI Summit and Awards last week. Kamath touched upon a variety of topics including the growth of the Indian economy, possible challenges, the private investment cycle, recent RBI regulations and the fintech ecosystem. Edited excerpts:

On the India growth story

I think we have clearly proven several things to ourselves that we could ride, first, the covid crisis, because it now looks like it is a distant memory. But for me, it was fresh because that was probably the first event in my life, where I did not know where we would head.

The pleasant surprise was how quickly the Indian industry bounced back, and how well the economic conditions and the whole process of stabilizing was done, both by the Centre and the Reserve Bank of India. And within six months, corporates came back, more efficient than they were. I think the hidden gain there was probably a 25% productivity bump, which yet no economist (has) talked about.

On private investment cycle