Mumbai, August 20, 2015: State Bank of India (SBI) today successfully concluded the 2nd SBI Banking & Economics Conclave 2015. This Conclave was organized with an intention to stimulate debate and critical thinking on various topic related to banking industry in India. The Conclave was inaugurated by Hon. Minister of Finance Shri Arun Jaitley and Minister of State, Finance Mr. Jayant Sinha. The Conclave was graced by dignitaries from a wide spectrum of business activity like banking, financial institutions, corporate, law and Government. The high and mighty of Indian corporate - Mr. Baba Kalyani, Ms. Kiran M Shaw, Ms. Chanda Kochhar; Justice (Retd.) A K Ganguly from judiciary, Mr. Amitabh Kant, Secretary, DIPP and others graced the occasion on Second day.
Chairman SBI in her opening tête-à-tête session with RBI Governor, Dr Raghuram Rajan discussed various issues like payment banks, state of the economy, etc. The Governor in turn emphasized on project evaluation and structuring by banks, issues of HR in banking such as providing higher compensation to top management and its impact on costing. Can ESOPs help retain talent in public sector banks was also discussed.
There were four panel discussions during the day. The first panel discussed the topic: Agenda to rev up growth. According to this panel, to rev up growth there is a need to take measures on ease of doing business. Infrastructure spending is imperative to India’s growth. Nurturing critical talent, scaling up innovation and use of digital technology will drive growth in sectors, in particular, pharmaceuticals and manufacturing.
The second panel discussion was: Judiciary and Banking-The Missing Link. The panel discussion concluded that there is an urgent need to bring the forefront, judicial reform discussion in much greater way than earlier. Adjournments, transparency, accountability and use of IT solutions are some of the key areas where judicial infrastructure needs immediate attention. Banks must ensure that their legal contracts keep abreast with judicial pronouncements.
The third panel discussion was on capital raising for banks in the context of BASEL III norms. The panel was of the view that India needs to tap all sources of capital, be it foreign or domestic. However, some panelists were of the view that BASEL III norms may depress the Return on Equity going forward, which may in turn constrain the future capital raising exercise. Some panelists also felt that profit alone is the starting point for PSBs and profitability and efficiency will require a fine balancing act in future.
The fourth panel of economists discussed the current macroeconomic challenges beyond CPI and Repo Rate. This panel discussed a numbers of issues such as labor productivity, capital intensity of Indian economy, health sector reforms, exchange rates and exports growth. In particular, the panel noted that demographic dividends should be properly used to augment our growth potential.