Online banking to kill physical banks in 5-6 years: Amitabh Kant

Kant said Indian government is making things easy and simple for businesses. 

New Delhi, June 9: NITI Aayog CEO Amitabh Kant said that the next 5-6 years will see the death of physical banks. It’ll be difficult for physical banks to survive because their cost will be enormous compared to online instruments, he stated.

He said that with proliferation of mobile phones and internet based transaction, it will be easy for financial technology firm to do analysis and provide loans to person who requires it and has good credit history.

“Amazing thing is that a lot of this going to happen because India will become data rich before it becomes rich. Our ability to use technology, analyse data and able to reach and provide financial inclusion to people in rural area will be key drivers of growth,” Kant said.

“There is lot happening in India because of Internet. We have leap frogged US technology industry with very simple and practical innovation. Cost of customer acquisition in India fell down to USD 1 where across America and Europe the cost of acquiring is between USD 28-30,” he added.

Lenders are using data through mobile phones to identify customers and their spending habits. “All eKYC will be made Aadhaar-based soon and the spread of physical infrastructure in the next two years will be a game changer for the industry,” Kant remarked.

However, Cholamandalam Investment and Finance Company, Tech Mahindra and a consortium of Sun Pharmaceutical Industries promoter Dilip Shanghvi, IDFC Bank and Telenor Financial Services gave up their plans to roll out payments bank.

Out of the remaining eight companies in the fray, Airtel, India Post Payments Bank and Chinese firm Alibaba backed Paytm have launched their commercial operations.

Other players are Aditya Birla Nuvo, Fino PayTech, National Securities Depository, Reliance Industries and Vodafone m-pesa.

Kant said Indian government is making things easy and simple for businesses.

[original Link:]

Leave a comment