‘Good times will last longer’

The going has never been so good for public-sector banks (PSBs). K V Kamath, chairman Nabfid & Jio Financial Services, in Business Standard BFSI Insight Summit's first Fireside chat had said this was the best year for Indian banking in 50 years. In this backdrop, BS Consulting Editor Tamal Bandyopadhyay spoke on the situation's sustainability with some of India's leading PSB chiefs CS Setty, managing director (MD), State Bank of India; K Satyanarayana Raju, MD & CEO (chief executive officer), Canara Bank; and Ashwani Kumar, MD & CEO, Uco Bank. Edited excerpts:

How long will the good times last? 
ASHWANI KUMAR: Yes, good times are here and the question is how long they will last. Currently, the high-frequency indicators - GST collections, e-way bill generation, Fastag collections and road construction-are at a record level and PSUS' order book is around 27 trillion. The order book of 300 listed companies is around 5 times their quarterly revenue. With all this and the way the government is pushing through the budgetary announcement and the PLI (production-linked incentive) schemes, growth should continue.

With growth, there will be good credit demand. So, interest incomes will continue to rise and there will be a chase for deposits. There will also be some pressure on the NIM (net interest margin). But PSBS are managing their deposits well.

KSATYANARAYANA RAJU: Looking at how long we have worked to reach here will give you confidence on how long it will continue. Two decades ago, with new-generation banks coming up with new technology, PSBs were struggling for investments in technology, and meeting the requirements of consumers.

In the last 8 years, there has been a sea change with the hard work put in by banks, government, regulator, etc. The injection of money by the government was for a good cause. Many reforms have taken place. There is a change in the working of PSBs. Now, PSBs have risen to the occasion and know what the client's requirements are. They started gaining people's trust, so even as they lost market share earlier, people will come back to them.

All PSBs have realised it is a buyers' market and developed their own research wings. They know how to do their stress tests, what is happening globally and how to take precautions. In all these things, professionalism has come in almost every PSB.