Decoding Banking And Insurance Sector's Contribution To India's Growth
India's banking and insurance sectors have started their long run to contribute in making India a global superpower by 2047. Though the covid pandemic had hit out the sectors, it has taken a major comeback post pandemic with a very quick recovery.
Today a virtual session under Indo-US Economic Summit chaired by Vikas Vasal, National Managing Partner, Tax discussed on where does Indian banking and insurance sector stand after 75 years, and what is the future head. The session was joined in with panelists, Dr Ryan Engen, Economic Strategy Unit Chief of US Embassy; Shanti Ekambaram, Director, Kotak Mahindra; NS Kannan, MD & Director, ICICI Prudential Life Insurance; Amit Gupta, Executive VP, National Head, SBI Funds; Parul Verma, Partner in Kochhar & Co.; and Khushroo Panthaky, Chartered Accountant.
The panelists agreed to the point that India's banking and insurance sector has resulted a vast development since decades, and will be developing ahead with the power of technology and digitisation.
As the discussion was opened by Dr Ryan Engen, while talking on India to become the 3rd largest economy in the world, he said, "The banking sector allocates capital that needs to grow and insurance help manage risk. I am confident, once these cornerstones are properly placed, India will naturally rise to become an economic superpower as it should".
He elaborated that the points India needs to focus in respect to banking is, it should move ahead with ease of doing business, women empowerment, need to expand its financial administrative capacity, also India needs to close the talent gap.
Shanti Ekambaram Group President and Director, Kotak Mahindra Bank emphasised that the banking sector went through a difficult phase during covid, but thenafter banks are cleaned up, balanced sheets are capitalised, and some of the governmental steps will lead India to become one of the best growing economies in the world.
The panelists also discussed on the fact that though India's savings rate is 30 per cent, there is an USD 7 billion investment made by Indian investors in the international markets, especially USA.
Shanti Ekambaram said, as a huge number of Indian students go out for higher education, US can collaborate with India to setup universities here. Banking system plays a huge role in this through financing, education loans, services that would increase the flow of engagement between the two nations.
NS Kannan said, "As insurance are sold as long term investments, in the last two decades premium increased 13-fold. The sum assured in GDP was 50 per cent in 2002, but recently in 2021 it hiked to 95 per cent."
"The FDI limits have also increased in the insurance sector. At the time of liberalisation in India, the FDI limit was 26 per cent, then in 2015 it grew to 49 per cent, and most recently in 2021 it hiked to 74 per cent."
He said that the Insurance Regulatory and Development Authority (IRDA) is continuously giving an effort for spreading awareness regarding insurance in India and by 2047, the regular aims that no person or family in the country should be without an insurance.
Apart from that, it was discussed that the International Financial Reporting Standards (IFRS) application in banking and insurance is very complex, and needs to go through a rigid discussion before implementation. Hence, RBI is going with a phased manner as it has brought many guidelines for implementation of IFRS.
The summit was organised by Indo-American Chamber of Commerce (IACC) North India Council (NIC). Union Road Transport and Highways Minister, Nitin Gadakari was the chief guest. While Patricia A Lacina, Charge D' Affaires, US Embassy was the guest of honor.
