SBI Chairman Rajnish Kumar noted that the Indian economy was going through a transition phase due to the critical reforms undertaken in the past few years and that the nation’s growth would soon be back on track.
Chairman Kumar was in Washington last week as a part of the Indian delegation led by Finance Minister Nirmala Sitharaman to attend the annual meet of the World Bank and the IMF.
In an interview, Kumar told reporters,
“Growth can come back. Because of a lot of (reforms), the economy is in transition. We had GST (goods and services tax). We had IBC (insolvency and bankruptcy code). All these reforms have been implemented in the last three years. And as a result, we are in a transition period. A lot of cleanups has happened in the corporate sector.”
India’s scope for growth
Kumar believes that disruption always happens when there is a transition. He further said that in terms of development, India is still not in the developed category and has a low per capita income, adding that India has a vast scope for growth with the demographics supporting the country.
Recently, the JP Morgan chairman Jamie Dimon said that the GDP growth number in India and China were “not terrible”, suggesting that the slowdown shouldn’t be causing extreme pessimism. According to reports, Dimon said that economies like China and India were growing at 5.5% and 5-6%, respectively, which was way better than the US at 2% and Europe at a 1% GDP growth rate.
The top Indian banker said that the Modi government had brought banking to the doorsteps of every house, over the past few years, adding that the activation of the accounts reached almost 90%. He sais that the average balance on the accounts touched Rs 1,900, with an accumulative savings balance of Rs 230 billion in June.
On being questioned about cryptocurrency, the SBI chairman said that at the current pace of digitization, at some point, a regulated cryptocurrency would be a better bet than an unregulated one. Kumar believes that the dark side of the internet might misuse digital currencies, which is why they must be regulated. Further, efforts were being put into the application of blockchain into the functioning of the banks.
