Axis Bank CEO and MD Amitabh Chaudhry said that the fintech industry and the non-banking finance companies (NBFCs) are attacking the most lucrative parts of the banking business. He added that the Reserve Bank of India’s (RBI) attempt to regulate these sectors is a welcome move.
While speaking at the fireside chat with Udayan Mukherjee, Global Business Editor– BT TV at the BT Banking & Economy Summit, Chaudhry said, “When you talk about fintech, they are coming attacking the juiciest parts of our business– where we make money.” He further said that fintechs have only two ways to make it with the RBI coming into the picture.
The Axis Bank MD said, “With the RBI coming in with some regulations, rightly so, I think the fintechs are realising that there are two ways they can play this. One is that you come through the front door, take the right license and then get supervised and regulated by the regulator. Or if you want to play outside the rules, then you become a kind of a quasi-distributor.”
He further added that fintechs will remain a competition to banks but also cautioned about the mistakes in the industry. Chaudhry underlines that one cannot assume a mortgage is safe because they have an asset.
He said, “You have seen some mistakes happening in the fintech world. You cannot assume that a mortgage is safe because you have an asset, you can still incur losses.”
Chaudhry was, however, not the only one to recognise the competition from the fintech industry. Former SBI chairman and BharatPe chairman Rajnish Kumar also acknowledged the role played by the fintech industry in ensuring digital mile connectivity.
Kumar said during a panel discussion at BT Banking & Economy Summit, “Fintechs can’t gather liabilities, but play a very critical role in the last mile connectivity through digital. They will also do something for 25 per cent less than what banks would do for. India is a big country and these three (banks, fintechs and NBFCs) can co-exist.”