'RBI action on some NBFCs warranted'

At least ₹1.5 trillion was lost in India's futures & options (F&O) market, with much of it funded through personal and unsecured loans, said K.V. Kamath, non-executive chairman of Jio Financial Services on Friday.

- K.V. Kamath, Non-Executive Chairman, Jio Financial Services

In a fireside chat with Tamal Bandyopadhyay at the Business Standard BFSI Insight Summit 2024, he said that the Reserve Bank of India's (RBI's) action on unsecured lending and non-banking financial companies (NBFCs) was warranted.

The media is abuzz about China's massive new stimulus package, and there's a lot of market speculation. Could you share your insights on what's happening in the US and China and the potential impact on India's economy?

My assessment is that their growth, where they transformed themselves, was from the year 2000 to 2015. And thereafter, it was natural that growth slowed down. So what they are now trying to do is stabilize growth at a new peg, as it were. From double digits, we are looking at a 5 percent or so growth rate. And when they expect that growth will be below that level, they try to support it. That's what we are seeing in the stimulus that they have just given.

With a ₹18 trillion economy, even if you grow at 5 percent, that's a large addition to it. So they are on that path. And they run it differently from what we do. They have been on a very low interest rate for a very long period. Deposit rates are around 2.5 percent, lending rates are 4.5 percent. And I would think that they will grow at 4.5-5 percent without too much trouble.

With the new US president, we will have to wait and watch what the policy change is. The markets in the US have given it a cheer. So let's see what follows.

You have unique insight into India's financial sector. With a rising credit-deposit ratio and increasing financialisation, are we witnessing a structural shift in the financial ecosystem?