‘Aadhaar, digital boost open new biz options’

Citi India is seeing new opportunities in Aadhaar and digitisation following reforms by the government and regulator, even as Asia is turning out to be integral to the multinational bank’s global growth strategy. The lender seeks to grow its market share across its cards and wealth management business in retail. On the corporate side it sees opportunities across foreign investment and market flows, and cash and-trade business.

“For some time now, we have had a strong view that India is in the crosshairs of global capital flows. This has manifested in significant increases in foreign direct investment to India at a time when world FDI is shrinking and this is evidenced by foreign portfolio investment flows from multiple sources,” Pramit Jhaveri, CEO, Citi India, told TOI in an exclusive interview.

Besides supporting large businesses that continue to pursue growth, Jhaveri said that the most exciting opportunity is in small- and mid-sized businesses. “These are part of the global supply chain. They will be big beneficiaries of GST as they can get more credit from the system.”

In addition, Jhaveri said that there are indications that credit growth is coming back. “If you look at any economy in the world, the drivers in India are arguably the most attractive opportunity. When you put together low-credit penetration, the presence of Aadhaar, digitisation as an enabler, and overlay all those with GST, there is extraordinary potential in the market.”

“India needs a higher credit-to-GDP ratio and greater credit penetration from the formal sector. Credit needs are highest in SME and in the bottom half of the income pyramid. Accordingly, the industry should welcome capital from all sources to achieve these objectives. To say we must seek only domestic capital or shun foreign capital is self-defeating,” Jhaveri added.
According to Jhaveri, the overhang of bad debt needs the passage of time to clear. “All of the enablers are now in place to facilitate these processes — legislative, regulatory, legal, etc. Unsurprisingly, changes in behaviour have started to happen,” said Jhaveri.

The government push towards digitisation and demand from corporates and consumers alike has resulted in India becoming an innovation hub. “Unlike the past when a lot of technology solutions were imported from the West, today we develop solutions and open up APIs (application programming interfaces) to financial tech companies to explore new products. These in turn can be exported to the rest of the world,” said Jhaveri.

For example, the bank’s project, Hello, a digital relationship management platform on Citi Mobile in India, was developed in the country and is being exported to 14 countries. The lender is counting on technology to grow its market share and headcount in India without increasing the physical branch network. The combination of Aadhaar and telephony penetration, and an ecosystem that fosters digitisation, are huge multipliers for the financial services industry, Jhaveri said.

“On the consumer banking front, we have witnessed nothing short of a revolution in India’s digital journey and progress. We are counting on accelerated digitisation and partnerships with multiple players to create scale well beyond our physical footprint,” Jhaveri said.