Indian Banking : Post Demonetisation @ MCCI

The MCCI Chamber organized a Interactive Session with Shri Ashwani Kumar, Chairman & Managing Director, DENA Bank on “Indian Banking : Post Demonetisation” today.


“Demonetisation has been a Blessing in Disguise and there will be a V–shaped recovery post demonetization”, said Shri Ashwani Kumar. Although there were disruptions earlier, these would phase out in course of time and would not affect the growth path in the medium term. World Bank had predicted 6.6 p.c. GDP growth rate with a slightly higher growth rate from GOI, he noted. Another major benefit of demonetization was that there had been lots of movements along the digital line and the transition from “less cash to cashless” was important, he felt.

Raising capital in line with the requirements for BASEL III norms to be put in place from 1st April, 2019 was another challenge. The requirements were of the order of Rs 5 lakh cr a few years back which had now come down to 1.75 He was hopeful that the requirements would be for met.

Speaking on 65 p.c. holding by the Government in most of the public sector banks, he was of the opinion that banks should not go to public as prices were low. More time would have to be given to banks before going to open market, he maintained.

Regarding NPAs, he felt that the worst was over. He was of the view that each sector like Iron & Steel, Real Estate, Power had its own problems, which led to huge NPAs. Diversion of funds was not the only issue. Regarding MSMEs, the cash driven sector suffered a lot after demonetization. However, the sector was now willing to embrace technology for moving forward. Regarding slow credit offtake, the Chairman commented on slow demand as the guiding force.

He was happy that Dena Bank had growth rate of around 9 p.c. and was hopeful that opening up of more foreign and private banks would encourage collaborative efforts in the economy and should not be considered as a threat.

The Session was chaired by Shri Ramesh Agarwal, Senior Vice President MCCI, who gave the Welcome Address.