By Sonali Kulkarni
The investment outlay towards digital payments is a welcome inclusion in the Union Budget. As per a recent Accenture research report, in India, 66.6 billion transactions worth $270.7 billion are expected to shift from cash to cards and digital payments by 2023.
This shift is expected to intensify the existing competition in the Indian payments space and ultimately, enhance consumer experience and convenience. However, the exact nature of the scheme of the outlay and its implementation will be instrumental in its success.
We are seeing some notable innovation coming out of India's fintech ecosystem – be it for digital payments, credit and risk management, underwriting or security. The initiative to set up a fintech hub in Gujarat International Finance Tech-City (GIFT) will spur investment and innovation designed to help financial institutions not just meet compliance requirements but also build more-personalized customer products and services.
The move to set up a new asset reconstruction company and an asset management company to take care of stressed assets of banks will facilitate more options for banks to manage their NPAs as the true impact of the pandemic on NPAs is still unclear, and is expected to be fully known only by Q1 FY2022.
The disinvestment and privatization related announcements related to the banking and insurance sectors will enable much-needed capital infusion, and thereby, unlock new growth opportunities in FY 22.
The author is Lead – Financial Services, Accenture in India. Views are personal.